The question the becomes, does your parents co-signing make it their debt or is it still your debt in the eyes of the CGA. If you would reapply next year you should reach out to your AO to find the answer. Because it would really suck to take out the loan and have an appointment recinded because of it, or have to find a way to pay it off on short notice.
We asked AO about this last year. Student loan debt is fine, we had asked about federal student loans in DS name with us as cosigners. AO said the only time student debt is a problem is if you go out and buy a new truck and have a big loan payment, or something like that.
Assuming we're talking student loans that can be deferred while a full time student, my understanding is that's not a disqualifier. Of course it's best to consult admissions on things like this for a definitive answer.
Sounds like it’s better to go out and buy a new truck AFTER getting admitted to CGA. Mom and Dad will enjoy driving it for a few years until the cadet is old enough to have it on campus.
If debt is in the student's name it doesn't matter when they acquire it. If it's in the parent's name it doesn't matter either way.
I believe it's interst free already. It gets paid back via payroll deductions from the stipend. No option to defer that I've heard of. But it can be paid by the family if they can and choose to do so. 529/ESA can be used so long as the particulars of the plan allow for other than tuition/room/board expenses. Same for scholarships.
@Northwoods has it right - there is no interest on the ICA loan. We paid it off using my cadet's 529, and so he got a little more in his paycheck since it didn't include the loan payments. At the end of 2/C year, cadets will be offered a very low interest startup loan from USAA or Navy Federal. My cadet used half of it towards a car, and invested the other half, so he has income to pay for the loan once the payments start (after graduation).
Would you suggest using 529 to max out Roth IRA as a MID? Is it a better idea to save the account for the all the things you listed?
Getting into the habit of saving and investing is great of course! Keep in mind, the total ICA type expenses at that place is only going to be in the $15-$20K range. Good chance a typical 529 is going to have a balance greater than than. Not to mention, the monthly payback amount is in the $250 range, so putting that in a Roth will put you at less than half the annual allowance. Just saying, there will be room to do what your saying as well as take advantage of the new rule with any excess funds.
Every family will have different needs so you need to do what makes the most sense. I think any financial advisor would tell you starting a retirement account of some variety as early as possible is smart. From a pure dollars and cents standpoint, paying back the ICA interest free over time while preserving the principle of your funds longer will make you more money. Is it some earth-shattering amount? Not really. Over the course of 2 years, depending how the money is invested you'll probably be about $1,000 to the good.