To pay for school next year I was planning on getting a student line of credit. I went to the bank and got the information about it. Here are the details...

I wanted it for $8,000
The interest rate is 5%
I do not pay a payment on the loan every month, instead I pay the interest every month until I graduate then I start paying off the loan.

My husband said I'll be paying $250 a month in just interest. So, that's $3,000 a year in JUST interest.

Does that sound resonable?. $3,000 a year in interest on just a $8,000 loan?!

Not sure where your husband got his figures. But even with daily compounding that seems off. Ask the bank for an amortization schedule. I think you will find the monthly interest to be about $35, not $250.

That's what I thought, but he called the bank, and he said that's what they told him.

So you call the bank and ask for clarification. If you have Excel you can create your own amortization. One month's interest on $8K is $33 and change. Even if you compound daily, its still not more than that.