Cow Loan

Discussion in 'Military Academy - USMA' started by buff81, Jan 18, 2012.

  1. buff81

    buff81 Moderator

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    If you are a Cow, Firstie or the parent of one:
    Did you or your cadet take the Cow loan?
    If so - what do you plan on doing (or did) with the loan?

    If you are a newish grad or the parent of one:
    Did you take the loan and if so - are you glad you did or wish you hadn't?
    If you did not take the loan - are you glad you didn't or wish you had?
    What did you do with the money?
     
  2. SamAca10

    SamAca10 Ensign - DWO

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    Can this be moved to the "After the Academy" part of the forum? We have a lot of other second class/firsties/recent grads from other Academies that could provide some perspective.
     
  3. airassault

    airassault Member

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    I had to look it up, and what I found is that it is a maximum of a $35,000 loan at 0.5% interest. I don't think that is bad at all, and as long as one is responsible and analyzes their wants v. needs, they should be fine. :thumb:
     
  4. America's Finest

    America's Finest USMA Cadet

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    That was last year's loan. This year, the standard loan is $36,000 at 0.75% interest with USAA. I know of at least one other bank that offered $37,500 at 0.50% this year but did not win "sponsorship" because they were not able to offer it to the entire class of 2013. A few people opted with that alternate option.

    I signed for it yesterday and should have the funds in my account on the 20th. I plan on investing all of it for the long term. Most people I have talked to are using a couple of thousand on a car and investing the rest as well.
     
  5. mom3boys

    mom3boys Parent

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    Son took it. 10K for a car, invested the rest. We've heard horror stories of classmates who foolishly lost all or most of it in risky investments...son is being very conservative w/ his $. He can take care of me in my old age :thumb:.
     
  6. airassault

    airassault Member

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    Good idea, and thanks for sharing your information!
     
  7. Dixieland

    Dixieland Member

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    Our family's trusted financial advisor and money guru found it frightening to borrow money to invest.
     
  8. kinnem

    kinnem Moderator

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    As long as you invest fairly conservatively it becomes more like arbitrage than investment at such low interest rates JMPO. Not sure I would do it either though
     
  9. PotentialParent

    PotentialParent Member

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    Interesting thread. My son will have to make this decision next year. What is the length of the loan? AF stated $36K at .75%, what is the answer to, for ____ months.

    My thought on this, is that the only prudent thing to do, is to invest the money. Borrowing money at 1% or even 0% for a car is common these days. Why use the Cow loan for a car? Even if you put it into Treasuries and pay the principal back with the amount you borrowed, you will be left with the couple of percent difference (Treasury rate minus the .75%) in the end. That is without risk.

    Interested to hear other views.
     
  10. Luigi59

    Luigi59 Banned

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    And of course, the legend (unsure if true) of the WP cadet who, facing an honor board around the same time, absconded with his Cow Loan cash and went AWOL to Sweden, along with the pretty girl who worked at the bookstore......
     
  11. Dixieland

    Dixieland Member

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    Just curious, kinnem, are you a West Point grad? Or are you a WP dad? I was just wondering where your perspective comes from.
     
    Last edited: Jan 19, 2012
  12. America's Finest

    America's Finest USMA Cadet

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    I heard it was Mexico and that "bookstore girl" didn't go with him. Either way, the only fact I know about that story is that he was caught.

    I also heard of a wealthy cadet a few years ago who went to Vegas and put his Cow Loan on black.

    The loan information is gone from my account on USAA (they said it would disappear temporarily a day or 2 before the funds appear) but I do remember it being a 5 year term (they make it to match your 5 year active duty commitment) with monthly payments somewhere in the $600's (withdrawn automatically from your account) . First payment isn't made until about 3 months after your graduation and you only end up paying around $1,500 in interest overall.
     
  13. Luigi59

    Luigi59 Banned

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    With Mohegan Sun just a short 10 minutes drive up Rt 32 from New London, I'm sure that thought has crossed the minds of many USCGA cadets, too. :biggrin:
     
  14. Hooah1775

    Hooah1775 Member

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  15. dunninla

    dunninla Member

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    I am assuming this is exclusive to West Point cadets, and not open to 3rd Year Army ROTC cadets?
     
  16. Hooah1775

    Hooah1775 Member

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    I found this on the USAA site: https://www.usaa.com/inet/pages/academy_refi_landing_main?EID=mkt_ent_academy_refi-08



    "Finance up to $35,000 at 0.5% APR1
    By attending a Service Academy, you've learned that achieving success requires preparation and discipline. Get started on planning your financial success with our Career Starter Loan.

    Pay off your existing class loan.
    Receive a USAA Free Checking account.
    Set up automatic payment from, and direct deposit into a USAA checking account. "
     
  17. Jcleppe

    Jcleppe Member

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    My son has told me about the loan as well, His friend that graduated last year took the loan and used part of it to finance a vehicle. The cadet was ROTC so I am assuming that the loan is available to ROTC cadets as well. That is the most that I have heard of this loan though son has brought it up a couple times as an option for purchasing a vehicle himself, we will discuss the pros and cons I am sure.
     
  18. Just_A_Mom

    Just_A_Mom Member

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    USAA has a Career Starter loan available for ROTC Cadets.
    My understanding is:
    You are eligible after you have successfully passed LDAC.
    You may borrow $25,000 at 3%.
    Payoff begins 6 months after graduation.
     
  19. kinnem

    kinnem Moderator

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    No not a WP grad or Dad. I have a son in NROTC as a College Programmer. He also began (never finished) an application ti USNA. I've hung out on these forums for quite a while and try to pass along what little knowledge or informed opinion I have.

    Of course none of that has anything to do with the cow loans. Seems to me it's fairly simple arithmetic that if I can borrow 35K at .75% and can invest it somewhere I can earn even just point or two higher, I can make some easy money. Not a lot necessarily, but I could do it.
     
  20. Jcleppe

    Jcleppe Member

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    Amount and terms are not quite as good as the loan availabe to West Point Grads. Definatly not worth taking the loan just to invest unless you pick your investments wisely and have a little luck considering the market as it is today. Some new car loans have interest rates that equal or beat the 3 %, using the loan for the purchase of a used vehicle could still be a good option. of course I'll disown him if he spends 25k on a used vehicle.

    Thanks for the info JAM
     

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