fin aid/scholarship/investment offset

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greetings,

i am looking to receive a few scholarships for the fall semester that could potentially offset my loans. my question is:would it be advantageous to pay down the debt now or invest the scholarhip money into a money market or mutual fund? in the same vein, are there any stipulations in terms of allocating a fraction of the scholarship money towards the debt if i chose to pay it down? as a full-time grad student, i am not working at the moment but let's just say i am not living from paycheck to paycheck either. your thoughts? thanks!

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[mpp]

It would depend on the interest rate on the loans versus the interest rate you could earn elsewhere (also need to take into account the tax deductibility of the student loan interest and the tax liability of any investment earnings).

Any stipulations on the scholarship money would depend on who is giving you the money and what their stipulations are.

Also note that any scholarship money not used to pay tution and school fees is counted as income on your taxes.