Pull back on 401k contributions or take student loans
![[Post New]](/jforum/templates/default/images/icon_minipost_new.gif){kind=icon}
Anonymous
|
I'm looking at doing a part-time certificate program with a tuition of about $10,000 all-in that I hope will lead to a higher paying job. I have to do more research but I think I can take out student loans to pay for it. It's in the evenings, so I would be able to continue working.
I currently max out my 401k, so I could pull back on those contributions to help pay for it, or I could take out loans. I have $10,000 in cash right now, but I'm hesitant to not have that money available in case of emergency. I currently make $90k, DH makes $60k (with $100k in student loan debt on an IBR plan), and one kid in daycare at about $1650/month. Only family debt is car loan (currently $16k at 1.75%), and mortgage at 3.875%. |
Anonymous
| What would be the interest rate on the loan? |
Anonymous
No idea yet. What is the going rate on student loans? |
Anonymous
Also, OP here. I have really excellent credit (over 800), so I anticipate being able to get a very good rate on a loan that I would try to pay off in 12-, or 18-months, tops. |
Anonymous
| You already have enough student loan debt in your household. If you need the certificate for your job, you make the job pay for it. |
Anonymous
I want the certificate so I can get a better job. My DH refuses to look for something more lucrative, so here I am. |
Anonymous
| I would pull back on 401k. If you make 90k then maxing it out is 20% of your income. Nothing wrong with doing 10% or less for a year. |
Anonymous
| In this case I'd scale back retirement for a bit. If you're maxing out, that's 20% of your income so lots of wihgle room. You could cut back to 10% and free up 8-9k that way. Seems reasonable for something that will likely advance your career. |
Anonymous
Your DH makes 60k has 100k in debt and refuses to look for something more lucrative? That would be a red flag for me unless there is a darn good reason like tuition benefits for college or an incredible pension. |
Anonymous
You have no idea how many times I have posted in the jobs forum about trying to encourage him to look for something else and the flack I have gotten for it and people telling me to get a different, better paying job myself. I’m just a money grabber, according to some. Anyway, he has an incredible person, and we have a child together, so, again, here I am. I just want to be able to afford a place to live that isn’t 30 miles from work. |
Anonymous
| Personally, I would not take on more debt when you could use cash by pulling back on 401k for a short while. If you get the better paying job, you can catch up later. OTOH, if you take a loan and don't get the better paying job, you've got even more debt to deal with. |
Anonymous
| I have no idea what kind of rate you can get on your student loan right now, but that should certainly be the deciding factor. If I were in your position my tentative plan would be to take out a loan and take the full 20 years to pay it back. I would only deviate from that if the rate is lousy - for me it would be a no brainer to things that way if the rate is sub 4; above 5 and I might pay in cash now; in the middle it could go either way. |
Anonymous
| A student loan is not going to be sub-4. Might be 4.5-5, or above 5. |
Anonymous
| Scale back on retirement. |
Anonymous
| Student loans for graduate programs are 6-7%. Cut back on retirement temporarily. |