What's the best way to pay full tuition?

<p>At this point, my family has made the decision to pay all 40k a year for my tuition. We didn't get any aid, the amount I'm getting from scholarships is not large, and so we are footing almost the entire bill. My question is, what is the best way to do this? Should we pay the tuition straight out, or should we take out loans and then pay them back? I'm not a very money-savvy person, so I don't know all the advantages of each of the different options that I have. What's the smartest thing to do?</p>

<p>It depends,</p>

<p>Some schools give a discount to students who have to pay full freight is the pay it off by a certain time (you should check your school's policy for this). IF your school offers such a discount, and you can afford to do it, this would be my first choice because you would actually be saving $.</p>

<p>My guess - note "guess" - you need to check for sure - is that the loans you may qualify for are not interest free until you graduate. If they are then you may want to look at that option. Some schools do offer a discount for cash (our son's doesn't). But they do have an options to spread payments over 11 or 12 months interest free. There is a small (under $100) fee but no other charges. We have found that to be a workable solution so far - paying out of current earnings and supplementing with savings. It depends on your situation. I'm not familiar with the loan option (at least for now) so I can't give you any advice on that topic.</p>

<p>As a freshman that is not eligible for financial aid, I do not think that he Would benefit from the loans because most of theme Would be PLUS loans in his parent's name. There are also schools that allow you to pre-pay tuition thus locking in against any future increases. You should really check all of your options, talk with your parents and go with what is best for all of you.</p>

<p>Interest rate is what matters...is the interest you would pay on loans greater than what you could earn in an account....</p>

<p>As well, you don't necessarily want to clean out parents bank accounts all at once in case of an emergency. </p>

<p>So sometimes, spending a little more to have security is important. What kind of payment plans does the school have?</p>

<p>I would say it's the after tax rate that matters.</p>

<p>Additionally, if your college accepts credit cards, look into that option. You can get a card that pays 1% back in cash and save a little that way, if you pay the balance off the next month. I saw that Discover had that option and the school my D is gong to will accept Discover and let you spread the payments over 12 months without any fees, so we are going to get that card and just use it for the tuition each month and pay the balance each month. Every little bit helps.</p>

<p>be careful with the card, after a certain time, the % can reallllllly jump up.....</p>

<p>If you do a home equity loan, the interest may be deductible. Check with your CPA</p>

<p>If you pay it off every month, the interest rate is not a factor.</p>

<p>We practice a variation of citygirlsmom's, kayjo's, and a blend of everybody's idea. </p>

<p>Cash or readily available funds is always better than having no cash and no debt. Many companies have alot of cash or near cash equivalents while at the same time have debt. Cash allows you have the options and opportunities to beat the interest on debt. No cash provides no options or chance to make more money.</p>

<p>Look at the situation of a home purchase. Is it better to buy the house with 100% cash or purchase with 80% debt, 20% cash, and the remaining cash used to furnish the house, the landscaping, and perhaps even the downpay for a home at the lake. Your net worth stays the same in both examples but the second example gives you the opportunity to enjoy appreciation of the home and lake house without further cash outlay. Further, if you let inflation work for you, you would have paid for the houses using cheaper dollars. The cost of this, is Interest. If you keep the interest expense manageable in relation to your investment, you should be fine. DO NOT let interest expense become a burden, but use it as your tool.</p>

<p>This is fairly simple economics that, hopefully, you will learn in college. In the scheme of things, the economics classes and personal finance will make and save you more money, than what you will make in your "job." (Perhaps a bit of an exaggeration.) The example I used is how banks makes money and why our nation hasn't declared bankrupcy.</p>

<p>Most of us learn this the hard way, even myself. Learn it the easy way and life will be a whole lot more pleasant.</p>

<p>some school will let you pay by month over 9 months. If you can't afford it then put on a credit card and keep applying for new credit card with 0% financing and keep transfering the balance, almost like a serial event, make sure you're never late, then you will be able to take advantage of a cheap source of financing.</p>

<p>Check on a month by month plan. My parents fronted my 40k bill for the last 4 years and did it with that plan...it worked out great. It allowed for them to pay things off without having to take out loans and for me to finish my undergrad without a single loan. We'll be doing the same when I start grad school next year.</p>