Best way to pay for Graduate school prior to company reimbursement.?

Question

I'm going back to school this summer to obtan my MBA. My comapnay reimburses me for all costs, however I still need to come up with $25,000 to pay for the first 2 terms. What's the best way to pay this (it will roll through a 2 year period before I can pay off the loan)? Basically my company will reimburse after I give them the grades for each semester, so I have to come up with the money up front for each semester. After the first semester I can just roll the money my company gives me into the following semesters. So I have the following options:

1. Take a loan from my 401K. 2. Apply for a Stafford loan. 3. Take out a home equity loan.

I'm not really sure which way to go, leaning towards the 401K, but I hate touching that money. Thanks for any advice you can give!

Answer 1

I would suggest going the traditional route of a Stafford Loan or Perkins loan. Don't withdraw from the 401k, or home equity loan.

Answer 2

I dissagree with your leaning.  Take out either a home equity or a stafford loan which ever has the lower interest rates and the best terms.  You lose so much potential profits from the 401 k.