Looking for tips on short term student loans

[Poundwise]

So Poundwise, Jr. is off to college in a couple of months!  He has grown a great deal both in body and mind,  and we are very proud of him. (He's quite frugal too.)

We were not intending to take out loans for him as we should be able to fully cover his costs without debt. Thus I didn't do any research on loans. However, with the market so down, our 529s have taken quite the beating and it seems a bad time to pull the money out; if we were to do so now, we might have to dip into our Roth IRAs to cover the costs and I'd rather not do so.

We're thinking of taking out a loan of $30-$50K until such time as the market recovers, at which point we can pay it off.  Any thoughts on how to start this process or what to watch out for?

[lakemom]

I would start by speaking with the school.  But just taking out a regular student loan (which they will offer) and paying it off as soon as the market recovers (a year or three) would suit your purpose.  I've ushered 4 through college (they paid their own way with minimal help from us) and I'm not familiar with any specifically short-term student loans but none come with prepayment penalties.  You could also speak with your own (or a local) bank and see about a loan with the 529 as security which may get you a better interest rate.

[secondcor521]

Two thoughts:

1.  When I briefly looked at student loans out of curiosity in about 2013, the origination fees were relatively large.  You'd borrow $100, they'd give you $95, then charge you $7 interest on the $100.

2.  Perhaps too late for you, but money you need soon shouldn't be in the market; your example demonstrates why.  I've plotted out my kids' college expenses over the next X years, and any money that is needed in four years (my arbitrary risk/reward line) is in bond funds, not stocks.

[Poundwise]

I would start by speaking with the school.  But just taking out a regular student loan (which they will offer) and paying it off as soon as the market recovers (a year or three) would suit your purpose.  I've ushered 4 through college (they paid their own way with minimal help from us) and I'm not familiar with any specifically short-term student loans but none come with prepayment penalties.  You could also speak with your own (or a local) bank and see about a loan with the 529 as security which may get you a better interest rate.

Thanks, we are looking through the materials the school sent us. There's just so much and it is bewildering.

Two thoughts:

1.  When I briefly looked at student loans out of curiosity in about 2013, the origination fees were relatively large.  You'd borrow $100, they'd give you $95, then charge you $7 interest on the $100.

Yikes!! No thanks.

2.  Perhaps too late for you, but money you need soon shouldn't be in the market; your example demonstrates why.  I've plotted out my kids' college expenses over the next X years, and any money that is needed in four years (my arbitrary risk/reward line) is in bond funds, not stocks.

Yes, too late. The NY fund which holds our 529s gradually phases the funds into 75% bonds, but still, the amount has dropped drastically!