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Financing Your MBA

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Re: Financing Your MBA [#permalink] New post 26 May 2011, 06:57
It was last week and it was with a co-signer.
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 07:57
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I thought I would share my very recent (this month) experience in financing my MBA:

1) I received 20.5K in Stafford Loans
2) I received the difference in Grad Plus Loans
3) I was approved for the same difference in private loans through Citizens Bank and Wells Fargo

My decision:

- IMO, it is a no-brainer to take on any UN-subsidized Stafford Loans: You can't beat no interest for 2.5 years and 6.8 % fixed rate isn't half bad. I will get $8,500 from the Federal loans for this academic year.
- I had some scholarship which reduced the amount a little
- Private Loans: I used the same link that was posted earlier to go through the private loan options before deciding on Citizens Bank since they cut off another 0.5% if you deposit payments from a Citizens Bank account. I have excellent credit and was approved for a good interest rate, but not the best (5.25% plus Libor). Fortunately, I had a cosigner who was willing to sign the loan with me. Upon re-applying, I was approved for a 3% + Libor interest rate. This means that, with the depositing from a CB acount, I will be paying interest at 2.5% plus Libor. I am lucky to have a cosigner but I know that my own credit made my interest rate strong as well and made my decision to go with a private loan all the more easy. If your school qualifies for the CB TruFit Student Loan, I would recommend it. If not, the other one I considered was Citi Bank's and it seemed to be a good option. However, I have to point out that it is possible for a cosigner to decrease your interest rate by 2+% (someone above said this is not likely)

Good luck in your financing ventures!
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 09:28
CAmba11 wrote:
I thought I would share my very recent (this month) experience in financing my MBA:

1) I received 20.5K in Stafford Loans
2) I received the difference in Grad Plus Loans
3) I was approved for the same difference in private loans through Citizens Bank and Wells Fargo

My decision:

- IMO, it is a no-brainer to take on any UN-subsidized Stafford Loans: You can't beat no interest for 2.5 years and 6.8 % fixed rate isn't half bad. I will get $8,500 from the Federal loans for this academic year.
- I had some scholarship which reduced the amount a little
- Private Loans: I used the same link that was posted earlier to go through the private loan options before deciding on Citizens Bank since they cut off another 0.5% if you deposit payments from a Citizens Bank account. I have excellent credit and was approved for a good interest rate, but not the best (5.25% plus Libor). Fortunately, I had a cosigner who was willing to sign the loan with me. Upon re-applying, I was approved for a 3% + Libor interest rate. This means that, with the depositing from a CB acount, I will be paying interest at 2.5% plus Libor. I am lucky to have a cosigner but I know that my own credit made my interest rate strong as well and made my decision to go with a private loan all the more easy. If your school qualifies for the CB TruFit Student Loan, I would recommend it. If not, the other one I considered was Citi Bank's and it seemed to be a good option. However, I have to point out that it is possible for a cosigner to decrease your interest rate by 2+% (someone above said this is not likely)

Good luck in your financing ventures!


I think the key here is to have good credit and make sure your co-signer has good credit too to get the best rates. My efforts have been mostly focused on Sallie Mae and Wells Fargo because they have forbearance for death and permanent disability. Call me paranoid but it's a nice policy to have. The question I have is how is the implementation of this policy different than the one for Federal loans (ie what's consider permanent disability).
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 10:14
CAmba11 wrote:
I thought I would share my very recent (this month) experience in financing my MBA:

1) I received 20.5K in Stafford Loans
2) I received the difference in Grad Plus Loans
3) I was approved for the same difference in private loans through Citizens Bank and Wells Fargo

My decision:

- IMO, it is a no-brainer to take on any UN-subsidized Stafford Loans: You can't beat no interest for 2.5 years and 6.8 % fixed rate isn't half bad. I will get $8,500 from the Federal loans for this academic year.
- I had some scholarship which reduced the amount a little
- Private Loans: I used the same link that was posted earlier to go through the private loan options before deciding on Citizens Bank since they cut off another 0.5% if you deposit payments from a Citizens Bank account. I have excellent credit and was approved for a good interest rate, but not the best (5.25% plus Libor). Fortunately, I had a cosigner who was willing to sign the loan with me. Upon re-applying, I was approved for a 3% + Libor interest rate. This means that, with the depositing from a CB acount, I will be paying interest at 2.5% plus Libor. I am lucky to have a cosigner but I know that my own credit made my interest rate strong as well and made my decision to go with a private loan all the more easy. If your school qualifies for the CB TruFit Student Loan, I would recommend it. If not, the other one I considered was Citi Bank's and it seemed to be a good option. However, I have to point out that it is possible for a cosigner to decrease your interest rate by 2+% (someone above said this is not likely)

Good luck in your financing ventures!


Thanks, this helps! I noticed on the TruFit loan they specifically say the disbursements are sent directly to the school, the Citi site didn't specify. How does this work since the total cost of attendance the school provides you with includes more than just tuition? If disbursements are made directly to the school, does this mean you cannot use funds from this loan to cover living expenses, books etc that must be paid independent of the school?
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 10:30
Mich,

That is a good question. I have not received the final disclosure for my private loan (Citizens verifies that I will be a student with my MBA program), but I believe that all funds flow through the school's financial aid office. Then, a portion is allocated to cover your tuition and the rest is dispensed to you for general use.

Each school may vary in the exact disbursement process so it's best to call your school's financial aid office and ask them how it will work.
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 13:53
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Just for reference, with no co-signer, Wells Fargo is giving me PRIME (3.25% currently) + 1.50% for 4.75% total. There are no origination fees and they will give a 0.25% reduction for auto-payment and a 0.5% reduction once you graduate.

While in school (assuming prime stays) - 4.75%
After Graduation (assuming prime stays low and auto-pay) - 4.75%-0.5% graduation reduction-0.25% for auto-payment = 4.0%
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 14:03
socalmike wrote:
Just for reference, with no co-signer, Wells Fargo is giving me PRIME (3.25% currently) + 1.50% for 4.75% total. There are no origination fees and they will give a 0.25% reduction for auto-payment and a 0.5% reduction once you graduate.

While in school (assuming prime stays low and auto-pay) - 4.50%
Graduation (assuming prime stays low and auto-pay) - 4.0%


I thought it was .25% after graduation. Also, if you have a Wells account already you can save another .25% (or .5% with a PMA account).

Big props to everyone on this message board. Because of you, I added my wife as a cosigner to my Sallie Mae loan and got 2% + LIBOR. I am just amazed that even with excellent credit, adding a cosigner made a 5% difference! I really would have quit had it not been for other people posting their experiences.
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 14:10
mEEchigan04 wrote:
socalmike wrote:
Just for reference, with no co-signer, Wells Fargo is giving me PRIME (3.25% currently) + 1.50% for 4.75% total. There are no origination fees and they will give a 0.25% reduction for auto-payment and a 0.5% reduction once you graduate.

While in school (assuming prime stays low and auto-pay) - 4.50%
Graduation (assuming prime stays low and auto-pay) - 4.0%


I thought it was .25% after graduation. Also, if you have a Wells account already you can save another .25% (or .5% with a PMA account).

Big props to everyone on this message board. Because of you, I added my wife as a cosigner to my Sallie Mae loan and got 2% + LIBOR. I am just amazed that even with excellent credit, adding a cosigner made a 5% difference! I really would have quit had it not been for other people posting their experiences.


Wow, I think I'm going to add my dad then! Did you also go to the website to re-apply or did you call SM and add your wife's info? Did they re-use your current application for data?

Also, here is the SM co-signer release policy:

Cosigner release

1 To qualify for cosigner release, the borrower must have successfully completed school, made 12 consecutive on-time principal and interest payments for Sallie Mae's Smart Option Student Loan® (24 consecutive on-time principal and interest payments are required for all other Sallie Mae private student loan programs), meet age of majority requirements, and meet the underwriting requirements when the request for cosigner release is processed. The borrower's account must remain current until the request for the cosigner release is processed. The borrower must be a U.S. citizen or permanent resident at the time the cosigner release is processed.
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 15:21
Thanks guys for all the info! I'm going to dinner at mom and dad's tonight, think it's perfect timing to bring up how responsible I am and why they should cosign for me :)
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Re: Financing Your MBA [#permalink] New post 26 May 2011, 15:29
Congrats meechigan! If you can get a competitive rate on a private loan, it is definitely more competitive than a Grad Plus loan these days.

Also, for those going into their first year, you always have the option to go with a federal loan for Year 2 if Libor or Prime rates shoot up. I think some hedging of loans between private and federal is a good move.

Good luck to all of you at school!
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Re: Financing Your MBA [#permalink] New post 27 May 2011, 00:26
I guess this discussion is relevant to American residents.

What about international students? What financing options are there for them?
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Re: Financing Your MBA [#permalink] New post 27 May 2011, 01:02
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Sorry, could not resist posting this BWeek article about a revolutionary source of funding for BSchool - your parents :roll: .... seriously?
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Financing Your MBA [#permalink] New post 27 May 2011, 01:08
nonameee wrote:
I guess this discussion is relevant to American residents.

What about international students? What financing options are there for them?


Actually, most of the discussion here about private lenders would be equally applicable to international students as well. The only additional data point internationals would need to research is whether they 'require' a us-based (citizen or permanent resident) co-signer or not. I would look at the specific schools' website as well since in a lot of cases, schools negotiate directly with private lenders to waive the requirement for co-signers.
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 08:10
Quick question - when getting funding from wells/sallie mae/citi are you getting it for both years or one year at a time? It seems like it would make sense to do 1 year at a time because you wouldn't want to accrue interest on money you don't need yet. However, do you get better rates on a larger sum of money versus two smaller sums?
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 08:12
they only do one year at a time.
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 09:58
Is rate shopping for student loans similar to mortgages, insofar as all applications within a 30-day timeframe count as one credit application? I'd like to check rates with a couple places, with and without a co-signer, but I don't want to screw up my credit by doing so.
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 10:05
tortoiserun wrote:
Is rate shopping for student loans similar to mortgages, insofar as all applications within a 30-day timeframe count as one credit application? I'd like to check rates with a couple places, with and without a co-signer, but I don't want to screw up my credit by doing so.


Short term - having a lot of credit inquiries may lower your credit slightly but I don't think it will have a detrimental effect, especially not long term.
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 10:06
Cookiesn wrote:
nonameee wrote:
I guess this discussion is relevant to American residents.

What about international students? What financing options are there for them?


Actually, most of the discussion here about private lenders would be equally applicable to international students as well. The only additional data point internationals would need to research is whether they 'require' a us-based (citizen or permanent resident) co-signer or not. I would look at the specific schools' website as well since in a lot of cases, schools negotiate directly with private lenders to waive the requirement for co-signers.


If I understood you correctly, what you're saying is that once you get in, you can get a loan from the US bank even though you're not an American resident?
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 10:25
nonameee wrote:
Cookiesn wrote:
nonameee wrote:
I guess this discussion is relevant to American residents.

What about international students? What financing options are there for them?


Actually, most of the discussion here about private lenders would be equally applicable to international students as well. The only additional data point internationals would need to research is whether they 'require' a us-based (citizen or permanent resident) co-signer or not. I would look at the specific schools' website as well since in a lot of cases, schools negotiate directly with private lenders to waive the requirement for co-signers.


If I understood you correctly, what you're saying is that once you get in, you can get a loan from the US bank even though you're not an American resident?


That's correct. Most of the top 15-20 (if not all) have developed loan programs in partnership with US/International banks. Specific details would of course be available on each school's website. Keep in mind, that you may still have to show proof of funding (covering your first year expenses) for your student visa, which does not rely on the use of loans.
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Re: Financing Your MBA [#permalink] New post 31 May 2011, 10:55
And also, the bank loan can cover all the expenses?
Re: Financing Your MBA   [#permalink] 31 May 2011, 10:55
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