Have some money, how should I use it?

[Lokhtar]

So I have some money saved up because I'm a non-trad and I've been working for 3-4 years (around $35k). Due to this, I didn't get any financial aid at my schools (my EFC was too high).

Right now the cost of education will be ~$70k/year (I'll be MS-1 next year). Should I take that money and use it towards the first year (that way I don't have to take any Grad Plus loans)? Or should I keep it in mutual funds? I fear that if I don't use it, my financial aid will continue to be denied and I'll end up costing myself money.

Also, I have $30k in unpaid loans from undergrad (I paid for my own education), but I haven't paid that off since the interest on those loans is very low and I can make more on that from interest on my investments.

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[plauto]

I'd make sure that money does not stay under your name.....😉, but I'd not do any long term investments as you might need that money for residency interviews or a down payment for a house in 4 years. Either play it right in the stock market (hard to do at the moment and time consuming) or high yield (not so much nowadays) savings acct. I would not use that money to repay loans or to help pay for school.

 

[Lokhtar]

Wouldn't I get more financial aid though if I used it for school?

 

[dpmd]

You might end up with subsidized loans or Perkins loans (both don't accrue interest in school), but as far as stuff you don't have to pay back it is hit or miss. If there was some legitimate way to get it out of your name but still have it available for future use, you still have to consider that you are trying to earn enough to beat the originations fees plus interest that starts to accrue at 6.8% as soon as your school or you gets the money. Can you beat that with your investments with low short term risk? If not you may consider using some (keeping a nice cushion for emergencies/unforseen expenses) and hoping for need based aid next year (you will at least get subsidized loans even if you still have a few thousand saved). Or, you can check and see if retirement accounts are counted and if not move some of the money there.

 

[plauto]

feel comfortable putting it in your parents' name? you'll want a house someday and $35,000 is a decent downpayment while you are a resident.