Have plenty in 529, but still taking out loans

[Anonymous]

We saved heavily for our DDs college and have about $250K in the oldest and $210K in the youngest. We should have enough to pay full freight for any school they get into.

However, since it looks like student loan forgiveness is going to happen, I’m inclined to change our plan and have them take out at least some level of loans just in case the next Democratic president decides to do another loan forgiveness right before an election. It looks like the interest will be subsidized while they are school and we can use the 529 funds for grandchildren or even take it out and pay a penalty.

Is anyone else thinking this way?

[Anonymous]

LOL. NO!! THAT’S NOT HOW IT WORKS!!

[Anonymous]

We qualified for some subsidized loans, and we're going to take them out even though we could manage without them. I'm not banking on loan forgiveness, just figured it was low-risk, low-cost way to keep more cash on hand in case personal finances take a hit sometime in the next four years.

Best case, we pay them off as soon as kiddo graduates so we don't start running up interest.

[Anonymous]

This seems like a troll post, but in case it’s not, remember that you can’t use a 529 to pay school loans

[Anonymous]

Can you pay off loans with 529 funds?

[Anonymous]

If Biden does forgive loans, every parent should be telling their child to take out some level of loans, at least $10K a year if in undergrad.

It’s a terrible policy for society, but if it happens in 2022, it’s likely to happen again in 2024.

[Anonymous]

Seriously?!? My brother and I both struggled to pay for college and grad school. We both worked through both and took out loans which we paid off. We (with our spouses) have saved and our thrilled to be able to offer our kids the ability to go wherever they want (within reason). We both have parameters based on values (my kids are in school and my brother’s oldest is starting the application process). I find posts like this contemptible. Loan forgiveness is for people who really need it - not for people like op to game the system.

[Anonymous]

Suppose we wiped away all student debt today. What would it mean for a student about to enroll in college this fall?

It means they would be smart to borrow every penny they could for school, and hope and pray for a politically inevitable second round of loan forgiveness. Maybe they would even choose a more expensive school. Why not?

At the same time, colleges and universities would certainly notice this increased willingness to pay higher tuition prices and would accordingly adjust prices upward — only adding to the already out-of-control tuition inflation.

It’s important for Biden to keep in mind that broad student loan forgiveness, while politically popular, would only exacerbate underlying problems with tuition inflation and overborrowing.

[Anonymous]

Take this to the politics forum and thank your lucky stars that your DD doesn't have to take out loans. She will meet, gasp, students paying their own tuition with loans/work and barely scraping by when she gets to college.

[Anonymous]

Anonymous wrote:We saved heavily for our DDs college and have about $250K in the oldest and $210K in the youngest. We should have enough to pay full freight for any school they get into.

However, since it looks like student loan forgiveness is going to happen, I’m inclined to change our plan and have them take out at least some level of loans just in case the next Democratic president decides to do another loan forgiveness right before an election. It looks like the interest will be subsidized while they are school and we can use the 529 funds for grandchildren or even take it out and pay a penalty.

Is anyone else thinking this way?

Troll.

[Anonymous]

This is a really tone deaf post.

[Anonymous]

Anonymous wrote:We saved heavily for our DDs college and have about $250K in the oldest and $210K in the youngest. We should have enough to pay full freight for any school they get into.

However, since it looks like student loan forgiveness is going to happen, I’m inclined to change our plan and have them take out at least some level of loans just in case the next Democratic president decides to do another loan forgiveness right before an election. It looks like the interest will be subsidized while they are school and we can use the 529 funds for grandchildren or even take it out and pay a penalty.

Is anyone else thinking this way?

If you were actually considering this, you would know that you don't qualify for subsidized Stafford loans, which are only available to borrowers with need. Unsubsidized loans are currently running at 3.73%, which isn't too terrible. Enjoy the loans.

[Anonymous]

Anonymous wrote:Can you pay off loans with 529 funds?

No

[Anonymous]

Is Biden considering forgiveness for just subsided loans or both subsidized and unsubsidized loans?

[Anonymous]

Anonymous wrote:Is Biden considering forgiveness for just subsided loans or both subsidized and unsubsidized loans?

He has paused payments for both types of loans until at least August of 2022. It would stand to reason that if he does forgive student loans, he will figure both types.