Should I use my savings or take a loan for college tuition?
Depleting remaining savings leaves you with a tiny cash buffer, while taking a private student loan incurs interest rates around 8% on the borrowed amount. This choice forces students to weigh the risk of exhausting their financial safety net against the long-term cost of taking on additional debt.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Paying tuition in cash to avoid accumulating more high-interest debtDid this help you?
- 2Taking out the student loan to preserve cash for post-graduation flexibility and emergency fundsDid this help you?
- 3getting lifeguard certificationDid this help you?
- 4working part-time hoursDid this help you?
- 5finding a second jobDid this help you?
- 6planning to buy a used bikeDid this help you?
- 7Taking out student and parent loansDid this help you?
- 8Attending community college for the first two years before transferringDid this help you?
- 9Working part-time, summer jobs, or securing positions as an RA or TADid this help you?
- 10Applying for continuous scholarshipsDid this help you?
- 11Commuting from home to save on housing costsDid this help you?
- 12comparing cash payment versus taking out various types of loansDid this help you?
- 13considering low- or no-interest promotional financing for home projectsDid this help you?
- 14keeping emergency funds in cash while evaluating borrowing optionsDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“I have no idea how I’m going to pay for this.”source ↗
“Even after minimal scholarships and stacking the loans available to us, we still have about a $20k gap this year… with three more years to go…”source ↗
“I have the following “safety net” and savings accounts that I consider “extra” and I need help knowing how to best fund a partial basement remodel and in 1-2 yrs a new vehicle.”source ↗
“Big question: what would be the smartest way to fund the basement, patio, and future vehicle?”source ↗
“would you use up the HYSA 25k first and then take out loan(s)and leave other accounts untouched? Or would you deplete the HYSA and the MM 80k fund to keep loans to an absolute minimum?”source ↗
“I anticipate our wants are bigger than our dispensable savings so expect a bit of loan needed somewhere. Just not sure where the dial should land on paying “cash” vs loan.”source ↗
“I can either pay the $10k tuition in cash and be left with $3k, or take out a $10k private student loan at around 8% and keep my savings.”source ↗
“What would you do: pay tuition in cash, take the loan and keep the savings, or take the loan and buy a used car?”source ↗
“ZERO college fund for my daughter when she started college. It is all I could do as a single mother without privilege to survive with a roof over our heads.”source ↗
“Even in-state schools are way too much for middle class parents, who don’t qualify for need-based scholarships, but can’t just cut a check.”source ↗
“Usually, saving up for a motorcycle + gear + paying for my own insurance + licensing could be easily paid for and saved up for in about 6 months (I did the math). However, only being 17 years old, I am still a kid and must keep in mind my parents' "suggestions" in life haha. They feel quite strongly about raising a significant amount of money for college instead of purchasing a motorcycle within the next year.”source ↗
Where this came up
People with this problem also raised
- 7Is it better to pay off credit card debt or keep cash in savings?
- 4How to balance saving money and traveling in college
- 6How to balance retirement savings and college funds
- 9Should I pay cash for a car or finance it?
- 79Should I pay off debt or start investing and saving?
- 17Should I buy property or keep my money invested?