🌱 How much would you save taking federal aid over paying cash for college?
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🎓 College Costs & Aid
Deciding whether to pay for college out of pocket or take federal aid is a common dilemma, especially for working adults. Taking subsidized aid costs nothing until graduation, while paying cash depletes your emergency reserves.
A 29-year-old on r/personalfinance with $40,000 in savings debated paying $4,500 for tuition or taking $5,000 in subsidized loans. Because these loans don't accrue interest while in school, taking the "free" loan can actually make you money.
📈 Savings & Runway
Subsidized student loans pause interest while you are enrolled at least half-time. If you take the aid, your unspent cash can sit in a high-yield savings account earning interest until you graduate.
The original poster worried about affording rent in a high COL area. Holding onto your cash preserves more runway, keeping months of rent securely covered in your bank account just in case.
🔗 See Also
For further related reading, check out:
📊 Results
Cash with Aid
Cash if Paid Cash
Rent Months Saved
4
Net Amount Saved
Calculator updated by heyfinfam (v26.8.0) · View history
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