I am a medical student and require federal student loans to pay for my tuition and living expenses. I have saved throughout the years in the form of a personal investing account. The purpose of these funds is to contribute towards future life expenses. If emergencies occur, then these funds are my only source of money for such occasions. When it comes to my educational expenses, do I have to exhaust all of my personal funds (whether it be cash from a bank account, an IRA, or a personal investing account) before I rely on student loans, or can I keep my funds intact and go straight to student loans?
You do not have to use your funds from the investment account. It is worth noting if a Muslim intends to get a loan from a non-Muslim bank, they should not do so with the intention of getting the loan with the condition of [paying] interest. Rather, it is necessary that they should do so with the intention that it is a transaction without return, even if they know that they will end up paying the capital as well as the interest.