Reinvesting Student Loans - A Good Idea?

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Hello.

I am entering medical school and the total amount in loans per year that I am receiving will be approx $65,000 ($42K for tuition and $23k for other expenses).

Just out of curiosity, if I were to say, invest whatever money I did not need (say, $3000) into a mutual fund, would that make any sense?

I dont know anything about investing. My interest rate for the loans (Stafford Federal Loan) is approx 6.8% and I don't have to start repaying them until I'm done with my residency (which is 8-10 years away). If I were to invest a modicum of the money, I could potentially earn on average 10%.

I figure that over 4 years, investing 3K with a difference of rates at say, 3% conservatively, I could MAKE approx $1,000. If they were good years, I could probably double or triple that amount.

BASICALLY, is it worth it (and legal?) to invest my loan or simply pay back whatever I have left over at the end of the year?

Reinvesting Student Loans - A Good Idea?

Unless you are absolutely certain that you can get a return greater than the interest on the loan, then you will lose money. IMO, you should pay back whatever you do not need. Compound interest is a biz-nitch and it can really add up to a big amount to pay off.

Oh, and one last piece of advice. Please don't be a jerk to pharmacists when you are practicing medicine. I get a verbal berating by physicians on a daily basis. It's not MY fault that your preferred drug ain't on the formulary.

Reinvesting Student Loans - A Good Idea?

It is a very risky strategy to undertake. What if you invest the $3000 and a year later is is worth only $2000?

Reinvesting Student Loans - A Good Idea?

I just graduated from B school and I did that. I borrowed about 25K more than I needed and added it to my brokerage account. Student loan rates were so cheap the past two years that it made sense for me. I borrowed in the 6% range and earned 40% on my portfolio each of the past two years. But I am a professional investor, not a doctor/scientist, so it probably made more sense for me than it does for you.

Reinvesting Student Loans - A Good Idea?

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