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Received Student Loan Check Today, What Should We Do With It?

Posted by david | January 25, 2007

Today we received my wife’s last student loan check for her education; she finally finishes school in May. Hooray! It is for quite a bit more than the tuition, leaving us with a few thousand bucks to “play” with. My thoughts on this are as follows:

Since the loan does not start accruing interest until a few months AFTER she graduates, we are not losing anything by keeping the money instead of just depositing the check and sending a big payment to the overall student loan debt. Of course, the ideal thing would be to just send it to our credit card which has about the exact same balance on it, but it is at 0% interest until June 2007. Then we could then look at our overall financial record and see that there is NO credit card debt on any card, and the only thing we owe on are cars and her student loan.

So…..any thoughts on this? Would you keep the money and earn some interest on it? Would you pay off the balance of the 0% credit card? Or would you just cash the check and send a big payment to the student loan, using their own money to pay back what they loaned you?

Decisions, decisions. This check is just sitting here begging me to go pick up a plasma TV, but of course I know better. Or do I? ;-) Kidding…

Posted under debt, education |

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    6 Comments so far
    1. Dave January 25, 2007 3:16 pm

      Hard to say without knowing more, but I might consider depositing it into a high-interest savings account (ie emmigrant direct) to pick up a few extra bucks before paying it back.

    2. Ellen January 25, 2007 4:51 pm

      Instead of using it to pay off 0% interest loans, I’d throw it into HSBC and get 5.05% on it until June when you have to start paying. Of course, if you’d be more emotionally comfortable with a lower amount of debt, rather than earning a few bucks of interest, you should definitely pay off one or another of the debts.

    3. David January 27, 2007 5:13 pm

      Well we have decided what to do with the money. We are going to pay off my wife’s $500 dentist bill, the balance of the credit card, and put the rest in our ING account. Feels good to have that stuff paid off, even if the amount is added to the student loan balance. Once that starts coming due, its time to start shoveling money at it!

      Thanks for the advice everyone!

    4. » Carnival of Personal Finance #85 @ fivecentnickel.com January 29, 2007 4:18 am

      [...] David presents Received Student Loan Check Today, What Should We Do With It? posted at My Two Dollars. [...]

    5. Stingy Student January 30, 2007 5:08 pm

      I wrote a post a couple of weeks ago on where to put your money: http://stingystudents.blogspot.com/2007/01/get-your-gs-together-g-2-high-yield.html

      Also, HSBC is offering 6% on new balances! I wish I had waited a couple of weeks before depositing my loan check :(

    6. Saving Money On My Wife’s College Textbooks | My Two Dollars September 21, 2007 3:14 pm

      [...] I mentioned in a post yesterday, this semester marks my wife’s last semester in college. She has been going part time for [...]

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