Random Musings

Thankfully, you did not say that we could respond with a short answer only. I have never been known to mince words...

Wow! What a conundrum! I totally understand the issue, though I think the only options should be A or C. I must say I like A the best. I can say with confidence that it was a great feeling to finally pay off the student loans from my undergrad work - which was only about $20,000 total (paid back at $193.00 per month for 10 years). BUT - It would be very interesting to figure out the difference in payments and interest to proceed with selection "C" - would you come out better or worse.

Well, now having paid off the student loand, but currently living in the world of adulthood, paying off credit cards and my truck... I think it would not be completely unwise to pay off the credit cards and car. Here is my reasoning: Less bills to worry about while finishing school; One payment to make after school is finished; and the belief that 'student aid' doesn't cover just tuition - it also covers room and board (thus the doms and cafeteria food) - so it must also cover the bills that we create to survive.

So - my final thought? Choose 'C' with the condition that this only happen one time. Do not create for yourself more headache so that next year you come to the same dilemma. :) I could go on, but I won't.

Wendy

I would say most definately C! The interest rate alone is worth it. Almost always chose a school loan over a credit card or car payment (at least that is what the money guys I listen to and have heard speak say). But here is what I might do...
use the money wisely, pay off what bills you can, but treat yourself for your good self control. Take like $100 (not a ton, but it's soemthing) and buy something good with it. Something you have been wanting...a reward for your good adult skills.
That's just me though.

You're getting some good advice here. I can't argue with what Jess and Wendy have said, I'll only add my own cautionary tale. When I was at Cascade, I used the excess student loan money to go out to eat, buy clothes, and visit friends far, far away. I'm glad I did those things, but not glad enough to justify the fact that I'm going to be paying $300 a month on those loans for 12 MORE years or some such. (Yeah, it's evidently only 10 years if you're responsible.) I would have been significantly more frugal if I'd had a little more common sense. And I'd probably be done paying off my loans by now. (I graduated in 1997, so that's a long time to be paying student loans. Don't let it happen to you!)

I think you should sit down and figure out how much you'll be paying for your loans, your credit cards, and your car (total, over however many years) with option A and option C. Once you've done that, I'm guessing that one option will be the clear winner, and you'll know you've made the right choice.

What would make C the best choice was if you were to save away the ammount that you paid toward your credit cards and your car loan and then put that money towards your school loan when it goes into repayment. This would take much self control, but in the end it will save you lots of money. Otherwise, if you just use your school loans to pay off other bills, what happens is that you won't be paying off your car loan for another ten years. Thats a lot of time for interest to acrue, even if it is only 4 or 5 percent.

Great advice, everyone. Thanks for helping me out in my financial dilemma.