Student Loans

I filled out loan information in early July to start my program in September. You could do it earlier than that but realistically you shouldn't need more than a month before tuition is due in order to get the paperwork in order and get the funds lined up.

I am taking variable rate loans as I plan to pay them off within a couple years of graduation. Alternatively, you could choose to keep them open following graduation, and pay them off only if rates rise. I wouldn't recommend the Stafford unsubsidized (6.8% fixed interest, max of $20,500 per year) because it has a 1% origination fee and you should be able to get lower variable rates from private lenders.

The private lenders I applied to are:
CU student loans (need to join a credit union to get a loan from them)
Wells Fargo (No cosigner required)
Discover Student Loans (offers a 2% principal forgiveness upon graduation)
Sallie Mae (worst rates of all)

CU student loans offered me the best rate last summer, but I reduced my loan amount because I thought I wouldn't need as much. This winter when I re-applied for a new loan, my credit score had dropped because of the loan I just took out. On my credit report, the new loan was an 'installment account' with a utilization ratio of 100% because no payments have been made yet! Luckily, Wells Fargo offered me the same rate again (with no cosigner), which was only slightly higher than the rate I was initially offered by CU student loans.

My advice: try to minimize the amount you borrow, but make sure you apply for a loan big enough to get you through the year.

You don't need to get the entire loan amount disbursed at the beginning of the year, and my understanding is that you can reduce the final loan amount if you do not need the entire disbursement at the end. Just don't set yourself up like I did, to be re-applying for loans with a poorer credit score - although I suppose that's what we all do when year 2 rolls around...

I also have funds in Roth IRAs that I could have pulled out to avoid loans altogether, but decided not to since in a few years my income might be too high to make Roth IRA contributions. I'm also fairly certain it's only a matter of time before the Roth conversion loophole is closed.