Heather,

First off, I’d like to thank you for having such a great website for students to ask questions. I’ve found many of the tools very helpful. 

As for my question, here is my situation. As an undergrad I was forced to take out more than 50K in private loans with a high interest rate because I had no co signer. Now, I am getting my Master’s degree and would like to move toward a PhD. My school’s aid packages offer me much more money than I need in a year through government loans with much lower interest rates and the opportunity for forgiveness. Do you think that it would be a good idea to take out extra student loans through my PhD to pay back the private high interest loans I have outstanding? I will not have job in graduate school so this is probably my only avenue to pay them back while pursuing my degree. My thought is that by the time I finish my PhD I could have switched all my loans to government loans and save money on the interest.

Thanks!

You’re welcome!

You may borrow federal student loans only to pay for educational expenses.  Educational expenses include all the costs associated with your attendance including your living expenses while you are in school.  You are limited by the “cost of attendance” determined by your school.  That said, money is fungible, and you are certainly right that you don’t want to owe any more than you have to on private student loans.  The federal debt has distinct advantages like fixed interest rates and flexible repayment terms.