UM...beyond,
I would be careful with that number. SA cadets/mids get a different amount and rate than ROTC cadets/mids. Unless things have changed ROTC is allowed 25K and I believe it is around 2.75. Most go through USAA for the starter loan.
~ There are caveats too.
~~ 1. The CoC will have to sign off on the paper work
~~ 2. If they fail to commission or complete those 4 yrs AD than the rate jumps up to something like APR +9.99 %
In this case the cadet in question has yet to become a POC.
My DS took the career starter loan via USAA. Signed the loan paperwork the day he commissioned. Had a 5K student loan for his entire college career. It was not a subsidized Stafford loan akait was personal like the OP. He did not take the 25K offered. He did take 10K. The 5K for the loan was 50 bucks a month and not worth taking the loan.
~ He is now an O3 (pinned on in July). Owns a home and so now with his mtg deduction he gets to deduct that student loan int. too. He bought his home as an O2 after UPT at the ripe old age of almost 24 (23 and 11 mos)
~~ The 10K he took, he immediately invested 5K in an IRA to max out...the other 5 was placed into a mutual money market fund that he could access at any given time.
~~~ He bought a brand new car (Toyota) for 18K at 0%.
JMPO, taking that starter loan to pay off college or buy a car is not always financially sound. Look at my DS. Yes, he took a total of 28K instead of the 25K he could get as a ROTC cadet. However.
1. By banking 10K in Roth IRA and Mutual funds, mtg lenders saw assets, not debt.
2. Due to pt #1. He was able to buy a home and now his college loan is a tax write off...career starter loan is not.
3. By buying a car using Toyota financing his interest rate was 0% not the 2.75% ( I think that is the USAA starter.....I know for ROTC cadets it is not 0.75% unless something has changed.,,huge change). He saved more money monthly because of the interest difference.
The starter loan is great. There are a ton of threads regarding this issue. Just saying, when it comes to the starter loan, look at the fine print. IMPO, my DS as an AF brat was thankful we said put 5k in easy access money. He was a silly wabbit and did not realize how much it costs to pay for cable hook up, that 1st commissary shopping trip where you buy those strange things like garbage bags, toilet paper, aluminum foil, milk, eggs, etc, and let's not forget things like pots. pans, utensils and plates (not the paper type)
~ Oh an did I forget to add in the fact that as a ROTC cadet you do not get paid until you report unlike an SA grad that collects pay the minute they commission?
~~ DS traveled from VA to TX, lived in the Qs for 7 days until they moved him into the student housing. He arrived 10/03. Moved into his furnished student housing (no towels, no sheets, no pot/pans, dishes, no tv, no cable,...bed, sofa and kitchen table) on the 10th. Want to know when he got his 1st ADAF paycheck? 11/1! He had to buy everything out of pocket to start his life...including traveling from VA to Tx. That is why the starter career loan exists impo.
Now what I will say is he should look into USAA. I am assuming that since he is contracted he is eligible to become a member. ASSUMING bc my kids were military brats since birth and that means my ROTC DS was a member from the get go. USAA is a great organization. Hornetguy (poster here) works for USAA. Their insurance rates are very low. They have an ATM refund aspect for debit cards. They offer AMEX credit cards where they waive the annual fee for AD members, including platinum.
~ Long term posters that have served will tell you we love Dec. as a USAA member. I don't if Flieger, Christcorp, CaotMJ, Scoutpilot, but if they are than they know what I am talking about. USAA will send a check in Dec. It is called the subscribers account. Depending on how the stock market goes, we usually get 300-400. Granted it took yrs, okay decades, but I am fine with that when Xmas rolls around.
~ My DS is going to have our 1st grandbaby in Nov. Want to guess where they got the car seat. You got it...USAA.
Just saying be smart financially.