This is an advanced strategy about how to use OPM (Other People's Money) to generate income for yourself. This is only for those that have extreme discipline as you must be able to resist the urge to spend these large sums of money. This is valuable for someone serving in the military and can use tuition assistance or if you have an alternate method of paying for school and don’t need the loan to pay for tuition itself. Student loan money is paid directly to the student and in some cases does not accrue any interest while you are in school (These are the offers we are looking for). This money can then be deposited into an interest-bearing account where it will earn money for you for the duration of the time you are attending school. Once the deferred interest period is over, pay off the principal loan amount to avoid paying any interest, and keep the money that your account generated.
The only loans that are worth attempting this with are Stafford Subsidized Loan, or a Career Starter Loan through the military. These loans both DO NOT accrue interest while the student is attending school.
The only loans that are worth attempting this with are Stafford Subsidized Loan, or a Career Starter Loan through the military. These loans both DO NOT accrue interest while the student is attending school.
Subsidized Stafford Loan
Subsidized Stafford Loans as of this post have an interest rate of 3.4% after graduation. Your amount of “need” will dictate the amount of money you can receive for your loan. Note this is not a grant; it is a loan and the student will have to pay this money back. $10,000 is a realistic figure for your 4 years of school but will vary depending on the college. $10,000 @ 2.75% earns $275 annually. Over 4 years of college this would be in excess of $1100; not a bad graduation present. At this point in time pay the loan in full and pocket the interest.
Subsidized Stafford Loans as of this post have an interest rate of 3.4% after graduation. Your amount of “need” will dictate the amount of money you can receive for your loan. Note this is not a grant; it is a loan and the student will have to pay this money back. $10,000 is a realistic figure for your 4 years of school but will vary depending on the college. $10,000 @ 2.75% earns $275 annually. Over 4 years of college this would be in excess of $1100; not a bad graduation present. At this point in time pay the loan in full and pocket the interest.
Career Starter Loan
This is a loan only available to those entering officer training programs for the military. Generally this loan is obtained at the beginning of your senior year of college. Upon commissioning as an officer in the military, a Career Starter loan raises from 0% to a 3% interest rate. This loan is available through USAA. The amount is generally significant, totaling up to $30,000. $30,000 @ 2.75% is $825 for the year. At the end of the year, use the money to pay the loan in full and pocket the interest.
This is a loan only available to those entering officer training programs for the military. Generally this loan is obtained at the beginning of your senior year of college. Upon commissioning as an officer in the military, a Career Starter loan raises from 0% to a 3% interest rate. This loan is available through USAA. The amount is generally significant, totaling up to $30,000. $30,000 @ 2.75% is $825 for the year. At the end of the year, use the money to pay the loan in full and pocket the interest.
No comments:
Post a Comment