trader1, you can defer payments on federal student loans without any negative repercussions if you're unemployed. most federal loan programs give you a grace period of between 6 - 9 months after graduation to begin making payments. unless you qualify for a subsidized loan however, interest would still accrue. also, it's now next to impossible to secure loans below 6% unless you qualify for a school's own institutional loan program and for that you have to demonstrate acute need.
my federal student loans from college (2004 vintage) will incur a < 2.00% rate for the remainder of their term. it's a
real pity that virtually all federal student loan programs were switched to fixed-rate programs before the Fed started easing interest rates again earlier this year.
trader1 wrote:
in my opinion, loans are probably the best way to go, so long as you can get one with interest rates below 6-8% and with no penalty fees for pre-paying it down before expiration. if anyone knows any loans that don't begin accruing interest until after graduation, then those would be the absolute no brainer. there is a risk with loans, b/c there's always the chance you could have no job for 6 months to a year following graduation. hopefully, you have a partner who will be able to not only cover daily living expenses, but such loan payments.
also, you're aware that if you're in b-school between 2008 and 2010, and assuming the very likely scenario that you fall in the 15% federal income tax bracket, you could sell appreciated stock holdings and incur 0% capital gains?
trader1 wrote:
and here's a tax consideration to consider. depending on your tax situation, whether you're single or married filing jointly, etc., you could seriously reduce your capital gains taxes when you're trading short-term (i.e., less than 1 year holding) during business school. if you're making say $30k in short term gains during b-school over one year, and this is your only income, then you're only paying 15% total taxes. see, your short-term caps gain rate is based off the tax bracket in which your ordinary income falls, which could be as low as 10%. and in this case, your ordinary income would be the profits from your trading , i.e. capital gains (plus any other ordinary income you and/or your partner may have). i think it's a no brainer to trade during b-school.