[DeathDonkey]

Thank you for the information. I misread the IRS publication and thought that since scholarships that would cover out of school expenses (like rent) are taxable income, loans would be as well. I now see that not only are they tax free, I believe I would be eligible for a student loan interest deduction eventually.

I have no debt currently, I rent an apartment, own a car, no credit card debt, no old student loans. I am just beginning a 2 year master's program. I don't have the answers to some of your detailed questions about the student loans but will find out.

I'm curious why you don't think "gambling" with that money is a good idea, as that is precisely what I had in mind. I also believe I could beat the interest I will owe with a CD or bonds. In short, I'm having a hard time finding any reason not to take the loans, other than I never have had any debt before. I guess this is the best kind of debt one could have though.

-DeathDonkey