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Financing Your MBA

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Re: Financing Your MBA [#permalink] New post 30 Aug 2013, 09:15
dilbert99 wrote:
Well I can say my experience with Sallie Mae was a waste of time. :roll: I applied for a variable rate private loan and their "offer" was a joke - 7% interest rate (their stated range is 2.5-7%, so basically I must be the worst credit out there). I have excellent credit with no debt at all, excellent income (>100k), and a substantial amount of assets. I was literally shocked / insulted to see the interest rate they wanted to charge me.


Don't feel too bad. I had the exact same experience. 780 credit score, 100k+ income, absolutely zero debt, and was quoted a similar rate. What a joke!
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Re: Financing Your MBA [#permalink] New post 22 Sep 2013, 07:11
I had a question about financial MBAP programs. I know my employers does tuition reimbursement, but the program I am interested in requires that the total tuition of $100k be payed in installments of 25% (basically 25k a semester). I'm not sure who has just 25k sitting out to pay for tuition for a semester, so I am wondering, how do most people pay the tuition for the semester and wait for grades in order to get there employers tuition reimbursement?
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Re: Financing Your MBA [#permalink] New post 08 Dec 2013, 04:03
hi can someone tell me loan options available for international students ?
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Re: Financing Your MBA [#permalink] New post 28 Jan 2014, 16:15
I have filled out a FAFSA application, and am now filling out a separate application for my school. The school application requires that I list any car I own as an asset. Does anyone know the effect this will have on my loan eligibility?
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Re: Financing Your MBA [#permalink] New post 14 Feb 2014, 05:16
I am planning for my MBA, but don't have finance,I really appreciate about your government toward you people....
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Re: Financing Your MBA [#permalink] New post 14 Feb 2014, 10:17
Have any of the international applicants/admitted folks contacted GLSC regarding a loan w/o co-signer? I didn't get a response from them, though I e-mailed them!

Best
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Re: Financing Your MBA [#permalink] New post 12 Mar 2014, 20:47
Can you post still more details pls
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Re: Financing Your MBA [#permalink] New post 26 Mar 2014, 05:47
Greetings!

I do not have much experience with student loans, but I am trying to get up to speed on the MBA student loan environment in short order and was hoping to take advantage of the collective knowledge of GMAT club as I go.

I already completed FAFSA and the default options (at least at Fuqua) seem to be:

1. Up to $US 20,500 per year in Federal Loans (Unsubsidzed in my case)
2. The remaining tuition balance in Federal PLUS loans

As far as rates go, it looks like the following are true currently:
1. Federal Unsubsidized Loans: 5.41% Fixed Interest Rate, 1.072% Loan Origination Fee (deducted immediately from the amount you receive) (http://studentaid.ed.gov/types/loans/su ... subsidized)
2. Direct PLUS Loan: 6.41% Fixed Interest Rate, 4.288% Loan Origination Fee (deducted immediately from the amount you receive). (http://studentaid.ed.gov/types/loans/plus)

I was not planning to use much in the way of savings, though I think I can scrape together enough to make interest payments while I am in school (this seems to be the preferred option, though correct me if I'm wrong).

I also started looking into alternatives and was curious about people's experiences.
Sallie Mae: 5.75% to 8.88% Fixed Rate, no loan origination fees.
CommonBond: 2% loan origination fee and 5.99% fixed interest rate (if you use automatic payments)
SoFi: (5.49% - 6.375% APR w/ automatic payments, No origination fees)

Any other lenders I should be looking into? Also, has anyone used SoFi or CommonBond? If so, what was your experience?

Thanks!
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Re: Financing Your MBA [#permalink] New post 26 Mar 2014, 06:10
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Here's the list of lenders I usually refer to. http://www.finaid.org/loans/privatestudentloans.phtml

I have undergrad loans (almost done) with Sallie Mae, Citibank, and Discover. I have MBA loans with Charter One and Discover. Discover's web portal smokes everyone else, but I pretty buy on price. My MBA loans are all private variable rate; at 3.5-4.25%, it was hard to pass up. Rates will undoubtedly rise in the next few years, but my timeframe for payback should only be 2-3 years. About 75% of my loans are fully deferred, the others are interest-only while in school.

Here's the list of factors I considered when weighing loan options.
Fed vs. private
Fixed or variable
Deferral options
Rate discounts or graduation reward $
Cosigner vs. none
Any fees (Rare. CommonBond has origination though)
Repayment length and flexibility
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Re: Financing Your MBA [#permalink] New post 26 Mar 2014, 09:20
brandon432 wrote:
Here's the list of lenders I usually refer to. http://www.finaid.org/loans/privatestudentloans.phtml

I have undergrad loans (almost done) with Sallie Mae, Citibank, and Discover. I have MBA loans with Charter One and Discover. Discover's web portal smokes everyone else, but I pretty buy on price. My MBA loans are all private variable rate; at 3.5-4.25%, it was hard to pass up. Rates will undoubtedly rise in the next few years, but my timeframe for payback should only be 2-3 years. About 75% of my loans are fully deferred, the others are interest-only while in school.

Here's the list of factors I considered when weighing loan options.
Fed vs. private
Fixed or variable
Deferral options
Rate discounts or graduation reward $
Cosigner vs. none
Any fees (Rare. CommonBond has origination though)
Repayment length and flexibility


That's a very helpful post, Brandon! Thank you!
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Re: Financing Your MBA [#permalink] New post 27 Mar 2014, 05:39
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brandon432 wrote:
Here's the list of lenders I usually refer to. http://www.finaid.org/loans/privatestudentloans.phtml


This is a great resource. Sounds like I have some comparing to do! Thank you!

brandon432 wrote:
I have undergrad loans (almost done) with Sallie Mae, Citibank, and Discover. I have MBA loans with Charter One and Discover. Discover's web portal smokes everyone else, but I pretty buy on price. My MBA loans are all private variable rate; at 3.5-4.25%, it was hard to pass up. Rates will undoubtedly rise in the next few years, but my timeframe for payback should only be 2-3 years. About 75% of my loans are fully deferred, the others are interest-only while in school.

Here's the list of factors I considered when weighing loan options.
Fed vs. private
Fixed or variable
Deferral options
Rate discounts or graduation reward $
Cosigner vs. none
Any fees (Rare. CommonBond has origination though)
Repayment length and flexibility


Also great information. To move a little into realm of best practices, from the little I've come to the following conclusions (correct me if I'm wrong):

Fed vs. private : In general, it seems like Fed are slightly more forgiving in terms of economic hardship, deferral options, etc. Unfortunately, given that PLUS loans have a 4.288% origination fee, it sounds like you pay a premium for this. Something I'm not really planning to take advantage of (If I am unemployed post-MBA, I have bigger problems).
Fixed or variable - Seems like interest rates are low now but will likely rise over the next few years (they really can't get lower). Seems like a gamble, and for the sake of having consistent payments, fixed seems to make sense for those of us who are more risk averse / like to plan (variable rates are evaluated quarterly). The downside being that variable rates seem to be a few points lower initially than fixed.
Deferral options - Seems like this depends largely on your means. If possible, it seems like paying off interest while in school is a good bet (otherwise you'll end up paying interest on your interest), though dollar-wise I'm not sure how much of a difference this makes.
Rate discounts or graduation reward $ - Haven't read anything about this... not sure how important it is?
Cosigner vs. none - Seems like having a cosigner (if you can find one) might lower the interest rate you pay... finding one if possible seems like the way to go if you have a family member with good credit.
Any fees (Rare. CommonBond has origination though) - If Federal didn't have such a high fee (highest I've seen from the few possibilities that I've looked at), I probably would just go with the default option. Working to avoid these (with the rate as high as it is, you're effectively paying another year of interest right out of the gate).
Repayment length and flexibility - Seems like lengths go from 5-30 years. I plan to live like a pauper for a few years after I graduate and although I'm planning to pay for tuition almost entirely with loans, I'm hoping to pay off my loans within 5-7 years. Federal seem to be the most flexible in terms of repayment, though again, it seems like you pay a premium for it.

There also seems to be the option to refinance or consolidate after you graduate (it seems like SoFi mostly exists to allow you to refinance interest rates at a lower rate). Again, not sure how often this is done in practice.

Am I on the right track?
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Re: Financing Your MBA [#permalink] New post 27 Mar 2014, 06:41
My thoughts on your comments.

Fed vs. private : Pretty much on the right track. If you're going the Fed route, start with Stafford. I haven't checked current rates, but as of last year interest/origination was 5.41/1.051% on Stafford and 6.41/4.24% on PLUS. Stafford graduate loans are capped at $20,500/yr and unsubsidized.

Fixed or variable - Again, you're pretty much spot on. For me, I figured a payback between 2-4 and felt that raising rates were unlikely to catch up with the savings. It sounds like I'm a bit more risk-neutral than you. You're reasoning is sound.

Deferral options - You could calculate the impact pretty easily. It's probably in the $5-10k range. The big difference is in the interest rate on a private loan. I found a 1-1.25% rate difference between full deferral and interest-only. I'm sure full repayment would have been lower still. Of course I would have had to borrow more to make those payments, which doesn't make sense. I opted to defer about 75% and go interest-only on 25% of the COA through two different private lenders.

Rate discounts or graduation reward $ - Rate discounts make a direct impact. Typical discounts might include .25% for having other accounts with the lender or .25% for setting up automatic repayments. Discover offers a 2% graduation reward. Some of the other too. You could calculate these back in to the APY if you wanted apples-to-apples.

Cosigner vs. none - Yup. You're rate can only be lower with a cosigner. I'm married, so my wife was a pretty safe bet.

Any fees (Rare. CommonBond has origination though) - Good points. Don't forget the relatively low fee Stafford's though.

Repayment length and flexibility - For private lenders, you'll typically get a better rate for committing to shorter repayment terms (.25-.5% per 5 year term reduction). Whereas, I was aggressive in figuring my repayment term for the fixed/variable decision, I was conservative here. Just in case something awful happened, I didn't want to be under the gun on a 5 year repay. I didn't consider anything less than 15, just to cover my ass.

I'll figure out refi when I get out, but there are definitely options. I also took the entire COA this year and will pay down the last of my higher-interest rate u/g loans with the money I have leftover. Call it a personal consolidation.
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Re: Financing Your MBA [#permalink] New post 27 Mar 2014, 06:45
One final note on credit reporting. The FICO formulas generally consider all hard inquiries for the same type of loan (student, auto, etc) within a 30-day period to be a single inquiry. To reduce your credit score hit while loan shopping, apply to all potential lenders at the same time.

Once you've applied, the lender emails will come hot and heavy for you to accept your loan. Really, you probably have 30-90 days to accept. Just get to the point where you can compare your specific terms and then make a decision.
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Re: Financing Your MBA [#permalink] New post 27 Mar 2014, 18:44
The reality of paying for school is now setting in and what was pure joy earlier this week has turned into a bit of stress...

Somehow I managed a fairly sizable scholarship but even so I'm looking at 50k+ in loans with my meager savings to date (~$30k). Should've saved more these past few years
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Re: Financing Your MBA [#permalink] New post 22 May 2014, 07:46
rjk6w4 wrote:
dilbert99 wrote:
Well I can say my experience with Sallie Mae was a waste of time. :roll: I applied for a variable rate private loan and their "offer" was a joke - 7% interest rate (their stated range is 2.5-7%, so basically I must be the worst credit out there). I have excellent credit with no debt at all, excellent income (>100k), and a substantial amount of assets. I was literally shocked / insulted to see the interest rate they wanted to charge me.


Don't feel too bad. I had the exact same experience. 780 credit score, 100k+ income, absolutely zero debt, and was quoted a similar rate. What a joke!


I'm in the exact same boat. I had to call them to make sure they weren't mistaken... When I realized they were serious I let out a laugh. I wonder what you have to do to get the 2.5% from Sallie Mae...

Discover and CharterOne (Citizens Bank) were far more reasonable.
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Re: Financing Your MBA [#permalink] New post 22 May 2014, 08:52
^yup. Mine are split between Discover (4% var. after discounts, full deferral) and CharterOne (3.25 var., interest only in school). CharterOne's servicer FirstMark is a PITA, but the rate makes it worthwhile. Discover is easy all around.

Sterling credit, good income at time of app, wife co-signed.

If you're shopping loans, keep in mind all apps for student debt within 30 days only count as a single hard inquiry for credit scoring purposes. Apply everywhere at once.

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Re: Financing Your MBA [#permalink] New post 23 May 2014, 07:04
brandon432 wrote:
^yup. Mine are split between Discover (4% var. after discounts, full deferral) and CharterOne (3.25 var., interest only in school). CharterOne's servicer FirstMark is a PITA, but the rate makes it worthwhile. Discover is easy all around.

Sterling credit, good income at time of app, wife co-signed.

If you're shopping loans, keep in mind all apps for student debt within 30 days only count as a single hard inquiry for credit scoring purposes. Apply everywhere at once.


Would you mind sharing why you selected two instead of going with either only CharterOne or only Discover?
Also, what makes CharterOne a PITA? (had to google to find out what this meant)
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Re: Financing Your MBA [#permalink] New post 26 May 2014, 10:14
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farful wrote:
brandon432 wrote:
^yup. Mine are split between Discover (4% var. after discounts, full deferral) and CharterOne (3.25 var., interest only in school). CharterOne's servicer FirstMark is a PITA, but the rate makes it worthwhile. Discover is easy all around.

Sterling credit, good income at time of app, wife co-signed.

If you're shopping loans, keep in mind all apps for student debt within 30 days only count as a single hard inquiry for credit scoring purposes. Apply everywhere at once.


Would you mind sharing why you selected two instead of going with either only CharterOne or only Discover?
Also, what makes CharterOne a PITA? (had to google to find out what this meant)


Sorry for the mysterious acronym. PITA = pain in the butt.

I split the loans, because I wanted to minimize my total interest costs. Lower rates are typically available for shorter repayment terms and less flexible deferment options (full pay or interest-only in-school). I applied to 7-8 or different lenders and each offered 3-10 combinations of rate/term/repayments. I think my repayment will be relatively short, but didn't feel comfortable locking myself into a 5-year plan on the whole amount. I took about 25% of the COA in a very low-rate, short repayment, interest payments in-school loan. But I took the rest in a moderately low rate, long repayment, fully deferred loan to provide flexibility.

CharterOne was great during the application process. A bit pushy when it comes to signing, but that's true for all lenders. After I signed, they turned my account over to a 3rd party servicer, which is pretty typical for many loans (student, auto, mortgage). The servicer, Firstmark, is lower-tech and much less responsive. They were supposed to have a 30-day turnaround on my autopayment setup (hardcopy form via snail mail) and they kept screwing it up. In total, it took 4 months and several hours on the phone to establish autopay and I lost out on the interest rate discount in the meantime. My emails and phone calls were completely ignored during the process.
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Re: Financing Your MBA [#permalink] New post 29 May 2014, 07:19
Anyone familiar with Federal Perkins Loans?

My EFC is decently low at 3000 (yay children!), but I wasn't offered any. How low do I need to get my EFC to qualify for Perkins?
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Re: Financing Your MBA [#permalink] New post 29 May 2014, 08:24
farful wrote:
Anyone familiar with Federal Perkins Loans?

My EFC is decently low at 3000 (yay children!), but I wasn't offered any. How low do I need to get my EFC to qualify for Perkins?


Check with your school to see if they participate in the Perkins Loan program. Not all do. Others (like Booth, I think) offer Perkins for 2Y only.
Re: Financing Your MBA   [#permalink] 29 May 2014, 08:24
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