Taking an unneeded college loan for fun and profit?

I’m going back for a master’s degree this fall and am weighing the idea of taking out a federal student loan that I don’t need.

In normal times, I would have just used the university’s option to pay tuition/fees with a credit card and been happy with easily hitting a CC’s signup bonus spending threshold. However, given all the rumblings about Biden exploring ways to forgive between $10k and $50k of federal loan debt per student, the option of forgoing the CC cash back and rolling the dice on loan forgiveness sure is tempting.

Curious what the members of this community would do. Thoughts?

  • Take out a federal student loan
  • Pay tuition with a cash back credit card

0 voters

This is an automatically-generated Wiki post for this new topic. Any member can edit this post and use it as a summary of the topic’s highlights.

What the interest rate and how long can you get any interest free deferral?

search my thread about forgiveness. Looks like it’s going to be an empty promise unless you go/went to a scam school

that being said i’d still take out a loan for consolidation or other option given how low the rate is.

Can you… get the loan, pay tuition with CC, then ask for a balance refund? :thinking: :laughing:

The interest rate is 5.3% + a one time 1% fee. Interest would start accruing as soon as the temporary 0% Covid interest rate expires at the end of September, of course that could be extended.

wife did that, and her loans are 85% forgiven for teaching so win-win. except for the 2% CC fee

Looks like loans can be returned in the first 120 days for a full refund. This would also buy some time to see if the 0% Covid interest rate is extended or if there is any forgiveness.

Free money for 120 days? Might as well use it as funding for a savings account sign up bonus while I wait to see how things shake out in Washington.

https://studentaid.gov/help-center/answers/article/can-i-cancel-loan

1 Like

I like this train of thought… I wonder if it would work if I pay with CC first before requesting a loan. “I decided I needed that loan after all. Books are super expensive!”

In the remote event they decide to forgive student loans, me thinks that will only apply to AA or BA/BS degrees, and not for professional or advanced degrees.

4 Likes

What is your current & expected future income level vs the median?
Decent chance that IF theres any loan forgiveness it will not apply to higher income households.

I vote no for multiple reasons. Its a gamble and not a good one.

3 Likes

While I agree with the sentiment, that would seem to be difficult to administer unless they just disallow people who went beyond a BA/BS for any forgiveness. It the stimulus was any hint, they prefer a hammer to a scalpel for these programs.

1 Like

Two great tastes that go great with covid… “prove I’m not too tired to work, er, excessively fatigued”

Here are the kind of federal loans that get wiped out if you get a full disability approved.

https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge

1 Like

biden’s stimulus was targeted. Trump’s wasn’t

I guess there will be more Pelosi supporters here now?

Probably not any more than PETA members supporting Hitler because he was a vegetarian. :grinning_face_with_smiling_eyes:

1 Like

Threads closed folks.

4 Likes

I’m supportive of any politician’s realization that they don’t have the power to do something that the clearly don’t have the power to do. It’s quite refreshing.

4 Likes

Almost as good as red flag laws. :sunny:

From a political standpoint, mid-term elections are coming up. If only Congress can forgive student loans, then you need to elect Democrats to get student loan forgiveness. If the President can do it via executive order, there is no need to elect Democrats to Congress to get student loan forgiveness. The narrative is changing to fit where the votes are needed.

2 Likes