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# Student Loan Question

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SVP
Joined: 04 Dec 2007
Posts: 1688
Schools: Kellogg '11

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11 Jan 2009, 14:51
Great timing for this thread - it was on my list to figure out how this stuff works this week

So to summarize the above posts:
1) To cover cost of attendance (as decreed by each school), I can use a combination of savings, govt and private student loans.
2) If I estimate my budget to be greater than the cost of attendance for whatever reason, I can use my savings and/or take out an impossible to find private non-student loan.
3) Then depending on my budget and my savings, it might be in my best interest to maximize the student loans and use the savings to cover the difference between the cost of attendance and the budget.

Is that right?

Just making sure I'm understanding correctly
VP
Joined: 09 Dec 2008
Posts: 1221
Schools: Kellogg Class of 2011

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11 Jan 2009, 15:02
Yes, you can borrow govt and private student loans up to the cost of attendance as calculated by the school. Also I believe that any scholarships or other free money the school gives you will reduce the amount of student loans available so that the combination of scholarships + govt & private student loans is capped at cost of attendance. I agree with you that with the availability of credit these days the best option if you think you'll need more than the school's estimated living expenses is to use the student loans to cover the cost of attendance and your savings to cover any extra expenses.
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Current Student
Joined: 09 Feb 2008
Posts: 149
Schools: Georgetown, UNC, UCLA, Duke, Wake Forest

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11 Jan 2009, 15:25
Anyone else thinking about getting a second job?
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Director
Joined: 20 Feb 2008
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Location: Texas
Schools: Kellogg Class of 2011

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11 Jan 2009, 15:30
Omne wrote:
Anyone else thinking about getting a second job?

Yup, it's on my list now. Might as well try and give myself the biggest nest egg possible.
SVP
Joined: 04 Dec 2007
Posts: 1688
Schools: Kellogg '11

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11 Jan 2009, 15:46
jb32 wrote:
Omne wrote:
Anyone else thinking about getting a second job?

Yup, it's on my list now. Might as well try and give myself the biggest nest egg possible.

You guys are thinking of doing this during school? or before school starts?
SVP
Status: Burning mid-night oil....daily
Joined: 07 Nov 2008
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Schools: Yale SOM 2011 Alum, Kellogg, Booth, Tuck
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11 Jan 2009, 15:56
Omne wrote:
Anyone else thinking about getting a second job?

It's really difficult for some of us to finance our education. However, you guys worked so hard in the past few months to study for GMAT, prepare app packages and now you guys are headed to some of the best MBA programs in the world....

FT MBA Programs probably require us to invest significant amount of time and effort - including studies, networking, interviewing etc... (I personally don't plan to work in any capacity in the next 2 years)

Your grades might suffer if you decide to get a job while enrolled in a FT program.

Are there any PT jobs that's ideal for FT bschool students like us? Please share if you guys have some kinda idea
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Director
Joined: 20 Feb 2008
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Location: Texas
Schools: Kellogg Class of 2011

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11 Jan 2009, 16:28
I mean between now and June. I could probably be a waiter 2 or 3 nights a week and pick up an extra \$3,000 between now and then. It would certainly help that is for sure.
Senior Manager
Joined: 30 Aug 2008
Posts: 251

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11 Jan 2009, 16:49
jb32 wrote:
I mean between now and June. I could probably be a waiter 2 or 3 nights a week and pick up an extra \$3,000 between now and then. It would certainly help that is for sure.

Just curious,why don't u put that effort on making money in the stock market?
Director
Joined: 20 Aug 2007
Posts: 850
Location: Chicago
Schools: Chicago Booth 2011

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11 Jan 2009, 17:06
Looks like I will be continuing my internet business. I really wanted to stop it when I hit school but it's only an hour a day so wtf I'll keep it going.
Current Student
Joined: 09 Feb 2008
Posts: 149
Schools: Georgetown, UNC, UCLA, Duke, Wake Forest

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11 Jan 2009, 20:47
Yeah, sorry, I should have specified and said a second job between now and leaving for school, to pay down debt/get a cushion to survive at least until the internship. I don't know about anyone else but my current job doesn't pay much at all. Good experience, good leadership and teamwork, not much money. I don't exactly have \$50k or so to help cover things while at school
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Status: Um... what do you want to know?
Joined: 04 Jun 2007
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Location: SF, CA, USA
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11 Jan 2009, 21:03
good stuff jb, thanks for the detail.

You are ALMOST correct in that all private student loans only allow up to the published cost of attendance (less financial aid). Maybe this has change (haven't checked since summer), but the CitiAssist Graduate Loan allows you to borrow up to \$150,000 total, without regard to cost of attendance. The rest follow what you posted.

Of course, if this changed, I apologize for misleading you guys...
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11 Jan 2009, 21:29
kryzak wrote:
good stuff jb, thanks for the detail.

You are ALMOST correct in that all private student loans only allow up to the published cost of attendance (less financial aid). Maybe this has change (haven't checked since summer), but the CitiAssist Graduate Loan allows you to borrow up to \$150,000 total, without regard to cost of attendance. The rest follow what you posted.

Of course, if this changed, I apologize for misleading you guys...

It has changed, Congress passed the Higher Education Opportunity Act on July 31st. It limits all financial aid to be capped at the total cost of attendance. While the CitiAssist loan may be a \$150,000 cap, it is also capped at the total cost of attendance or whichever is less.
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11 Jan 2009, 22:31
jb32 wrote:
It has changed, Congress passed the Higher Education Opportunity Act on July 31st. It limits all financial aid to be capped at the total cost of attendance. While the CitiAssist loan may be a \$150,000 cap, it is also capped at the total cost of attendance or whichever is less.

Ahh ok. Why would Congress pass something that stupid and call it "opportunity". Sigh.

I wonder why CitiAssist still kept it at \$150K on a sheet they passed out in September 2008. Weird.
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Current Student
Joined: 09 Feb 2008
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Schools: Georgetown, UNC, UCLA, Duke, Wake Forest

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12 Jan 2009, 05:15
kryzak wrote:
jb32 wrote:
It has changed, Congress passed the Higher Education Opportunity Act on July 31st. It limits all financial aid to be capped at the total cost of attendance. While the CitiAssist loan may be a \$150,000 cap, it is also capped at the total cost of attendance or whichever is less.

Ahh ok. Why would Congress pass something that stupid and call it "opportunity". Sigh.

I wonder why CitiAssist still kept it at \$150K on a sheet they passed out in September 2008. Weird.

To limit the debt of a recent graduate.
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Current Student
Joined: 19 Apr 2008
Posts: 248
Schools: R1: HBS(A), Kellogg(A), Michigan(A), Duke(A), Wharton(D)

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23 Mar 2009, 18:18
Has anyone started looking at private loans yet? HBS is saying they will have more info on June 1st, however I'd like to begin looking on my own now. I may use Graduate PLUS for my additional expenses above the Stafford, however I want to see what I can get as far as Private Loans. Any links or advice would be great!

Thanks!
Intern
Joined: 15 Dec 2008
Posts: 12
Schools: Kellogg, Haas, Ross, Sloan

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23 Mar 2009, 18:34
Hey guys,

I have a few more questions. These may be school-specific, but I thought I'd just throw them out there in case anyone has any experience.

1) I've received a preliminary financial aid package from my top choice school. If I take out the full \$20,500 amount allowed to me for the Stafford loans (subsidized and unsubsidized) and take out private loans from friends (non-family and non-relative) to supplement the rest of my Cost of Attendance instead of the Grad Plus or private loans, will this affect any scholarships or grants I have received?

2) In addition, will taking out private loans from friends negatively affect my eligibility for Stafford loans in any way for either year?

Thanks!
Intern
Joined: 01 Aug 2008
Posts: 45

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23 Mar 2009, 20:30
weezy25 wrote:
Hey guys,

I have a few more questions. These may be school-specific, but I thought I'd just throw them out there in case anyone has any experience.

1) I've received a preliminary financial aid package from my top choice school. If I take out the full \$20,500 amount allowed to me for the Stafford loans (subsidized and unsubsidized) and take out private loans from friends (non-family and non-relative) to supplement the rest of my Cost of Attendance instead of the Grad Plus or private loans, will this affect any scholarships or grants I have received?

2) In addition, will taking out private loans from friends negatively affect my eligibility for Stafford loans in any way for either year?

Thanks!

why would anyone besides you need to know that you borrowed money from a friend or family? i think you should just keep that to yourself.
VP
Joined: 09 Dec 2008
Posts: 1221
Schools: Kellogg Class of 2011

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24 Mar 2009, 05:09
weezy25 wrote:
Hey guys,

I have a few more questions. These may be school-specific, but I thought I'd just throw them out there in case anyone has any experience.

1) I've received a preliminary financial aid package from my top choice school. If I take out the full \$20,500 amount allowed to me for the Stafford loans (subsidized and unsubsidized) and take out private loans from friends (non-family and non-relative) to supplement the rest of my Cost of Attendance instead of the Grad Plus or private loans, will this affect any scholarships or grants I have received?

2) In addition, will taking out private loans from friends negatively affect my eligibility for Stafford loans in any way for either year?

Thanks!

I think that private loans would be viewed similarly as any other portion of the cost you pay thru savings (I'm assuming your friends will be disbursing the loan to you and not directly to the school) So it shouldn't affect scholarships or grants, or eligibility for gov't sponsored loans. One factor to consider though is that you'll need to file a new FAFSA and possibly your school's fin. aid application next spring, so any money you've received from your friends that's sitting in your bank accounts at that point would have to be reported on those as part of your assets, and that could affect need-based aid you're offered for next year, although it would not affect Stafford loan eligibility.
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Joined: 11 Nov 2008
Posts: 63
Schools: Kellogg 2011

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25 Mar 2009, 15:34
weezy25 wrote:
2) In addition, will taking out private loans from friends negatively affect my eligibility for Stafford loans in any way for either year?

Thanks!

Just to add to the confusion here, my understanding is that anyone (regardless of income) can get up to \$20,500 per year in Stafford loans. Income comes into play to determine whether the loan is subsidized (ie. interest doesn't accrue while you're in school). I want to say the interest rate is around 6.5% on those. Grad-PLUS, which can be taken out on top of Stafford and up to the school's determined budget, is 8.5% or something horrible like that.

http://studentaid.ed.gov/PORTALSWebApp/ ... tloans.jsp
GMAT Club Legend
Joined: 10 Apr 2007
Posts: 4318
Location: Back in Chicago, IL
Schools: Kellogg Alum: Class of 2010

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25 Mar 2009, 15:42
Pretty much everyone can qualify for as much as you want. If you research the options for different banks, some offer rate reductions of upto 0.75% (I believe citi does that) if you do direct payments from an account at their bank.

If you have family who is going to pay for it, dont tell the school that until you get your aid package. If they ask what your parents will be paying say 0. Cross the bridge about what happens if you get a personal loan after you figure out whether you might be getting free money. In my opinion maxing out loans while in school to get free money and then immediately paying it off with that with whatever family will give you would be the best way to go if thats what it comes down to.
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Kellogg Class of 2010...still active and willing to help. However, I do not do profile reviews, don't offer predictions on chances and am far to busy to review essays, so save the energy of writing me a PM seeking help for these. If I don't respond to a PM that is not one of the previously mentioned trash can destined messages, please don't take it personally I get so many messages I have a hard to responding to most. The more interesting, compelling, or humorous you message the more likely I am to respond.
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Re: Student Loan Question &nbs [#permalink] 25 Mar 2009, 15:42

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