Well, it is always important to pay your current bills first, as you can take out loans to cover the cost of college, but, after paying off your monthly bills, the decision between paying off your plus loan and taking out a new loan, or keeping the plus loan and putting the difference down on school has to do with your credit score. Depending on when you took out the plus loan, your interest rate should be 7.9%. Therefore, if you qualify for a loan with a lower interest rate than this, you should pay off the plus loan and take out the new loan for the whole amount. However, if you apply for a new loan and qualify for a loan with a higher interest rate than your plus loan, it would make sense to pay for this upcoming academic year with your plus loan and cash.
Be sure to follow us on Twitter: http://www.twitter.com/finaidforum