Using Student Loans to Invest

[Hannah S.]

Hey y'all, I am currently a nursing student interested in purchasing a single family home to live in for the next 5 semesters of college until graduation. I am planning to live in it for about another year afterwards and then use it as a rental after moving to a larger city for more career opportunities. I recieve a monthly structured settlement (which I currently use for rent and groceries), have an excellent credit score, several thousand saved as a cash down payment, and $4,000 in student loan debt so far. 

I am looking for creative financing options because I am still in college, and came across the idea of using student loans to invest. I have read that while it's not good idea to invest subsidized loans, unsubsidized loans are okay. Furthermore, I would face less potential legal issues since this loan money would be going towards housing (as a down payment). 

I was offered $10,500 in federal loans this semester, but I only need about $6,500 (leaving $4,000 in unsubsidized loans to either accept or decline). Federal loan interest rates currently sit at 3.73%, roughly the same rate as a 30-year mortgage, but is 0% until May 2022.

Some factors I've considered that make this taking this $4,000 attractive:

- I may be able to obtain lower interest rates with a larger down payment, offsetting student debt interest

- Avoiding PMI by making a down payment over 20%

- Booming housing market in my city with consistently increasing equity

- Living several years in the home leaving time to grow equity, potentially making much more than I owe in student debt

While all this may be legal, my biggest question is this - does this sound like a smart investment strategy? Or should I stick with stock investments while in school and use that money after graduation to buy a home?