[jzpiano]

I'm going to grad school full time this fall. My wife will be working while I'm in school and we will be short on cash (We are both 22), she is making under 30k a year, or about ~17k a year after taxes, FICA, Benefits, and 401k plan (Teacher FTW?!) and I won't be able to work much since classes are 3 days a week + other stuff. Although I'm hoping to make around ~10k in the next year through some type of work. We will be paying for all of school and I have the ~22k it will cost to go to school for the next 15 months already in the bank.

However, I filled out the FASFA forms and such just to see what they would offer and I was pleasantly surprised. I figured I would be offered nothing since I they know I have that money sitting around, but I was offered $8,500 in Federal Stanford Subsized Loans and $13,000 in Federal Stanford Un-Subsized Loans for the next 12 months, probably with more being offered next fall.

We are also looking at buying a place to live rather than renting within the next month or three, since around here apt. start around 1k a month. We also have an additional 50k for a down payment (This is in addition to the school money). The places we are looking to buy are around 150k-200k. We haven't applied for a mortgage yet since the wife just got the new job (can we apply for a mortgage now, even though the last 2 year's tax returns will show little income?). I'm also concerned that we couldn't get a loan for that amount that we want or that if we did we wouldn't be able to afford our monthly nut which it looks like we could barely or not even afford in a 1k a month apartment. Right now we have no car payments or credit card debt, but we have 14k of her student loans to pay off, which the payments start for in Dec. at $150 a month. I have no loans currently. I have our expenses broken down as follows (this is per month):

Student Loans (Her) -$150
Auto Insurance -$80
Automobile Expenses - $400
Food - $300
Cell Phone - $45 (Need, no main line)
Internet - $40 (Need as a student doing some internet heavy work)
Misc. Expenses - $150
Emergency - $150
Savings - $250
=$1565

Remember the wife make $1416 a month after deductions granted we don't "need" all of that, but in a way we do as you all know.

That doesn't include the important expense of Rent/Mortgage, Renters Insurance/ Homeowners Insurance, Property Tax (?) and Utilities. So I was figuring around 2.5-2.6k a month needed. (Again all of this is after taxes, benefits, FICA and her 401k plan is taken out.

Other than the money that is set aside for a downpayment and for school we are basically broke. The house money won't/can't (gifted) be touched for rent or anything like that, but can only go towards a down payments or mortgage payments. The school money I saved to come out of school debt free, but I'm semi flexible/want to do what's best with it.

Would it be best to take the 8.5k Subsized loans and then use that money for other stuff since the payments on that wouldn't start until June of '09. Would it be best to pay off my wife's loans now in full and take out a full loan on my school? Or maybe pay off all her school and take out only some loans?

Could I take out a mortgage for an extra 8.5k when and if we buy a place to cover the loans later and make it tax deductible? Or would it be better to leave the money in the bank now getting 5% interest and just leave it at that? I'm also just assuming that I should even touch the 13k Unsubsized loan because it would be stupid to take the 6.8% interest on that since I have the money to pay for it now.

My head's ready to explode this evening, any suggestions/advice would be appreciated since I'm feeling extremely overwhelmed right now and the wife really can't give any input on this since she doesn't understand/ handle this stuff.

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