Looking for advice on what to do with 12k

So you will start working in June '13? Do you have a full-time job lined up?

Either way, I would be inclined to keep the money in savings. Wait until you are a few months into your job. If things are going well, put that $12k against your loan.

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So you will start working in June '13? Do you have a full-time job lined up?

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yes

In the loan accruing interest? But I would probably agree with everyone else and make sure the job is 100% before you start paying anything off.

Since you can't pay the loan off outright, hang on to it and start a fund to purchase a house.

But the debt he has is manageable and he needs to save his cash and invest wisely in the first few years out of college.

If the OP had a job I'd advise paying it off, but since he doesn't I'd hold the cash in reserve. Not in another CD, they just don't pay enough to be worth it right now, just stick it in a checking account for the time being and don't spend it. Put it in a separate account if that helps remove temptation.

Debt can be perfectly fine if the rate isn't too high, after all bankers get rich by borrowing at a low rate and lending at a higher one. 5.5% is a little high these days but an emergency fund is pretty important too.

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Wait until you are a few months into your job. If things are going well, put that $12k against your loan.

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This, but until then, go to Campus Federal Credit Union and open up a Lagniappe checking account. You will earn 3.25% APY on balances up to $10,000 and receive unlimited ATM fee refunds nationwide. That's a quick easy way to make 3.25% without the hassle of investing and keeping it in your pocket in case you need it. You'll basically make $27 a month and have no fees of any kind.