Student loans, tell us your best deal

Question

Since a lot of us are shopping for student loans, it may be useful to discuss various loans and rates we have found to be our best deals.
A lot of schools have discontinued their direct loan programs, including Chicago and Duke so we have to find our own lenders. Loans that I am interested in are :Subsidized Stafford Loans, Unsubsidized Stafford Loans, Graduate Plus Loans and any other private loans.

pelihu · Answer

Well, for most it's pretty basic.

Both types of Stafford Loans have a rate set by the government; it doesn't matter what lender you choose. The difference is that with the subsidized interest does not accrue while you are in school. The major differences between lenders are small, with mostly some interest rate reductions if you make your payments on time or use automatic payments.

I'm pretty sure the plus loans are for parents, so if you're parents are borrowing money to pay for your education, that is available to them.

Private loans are where you will find bigger differences. The others are pretty much just set up according to federal guidelines.

solaris1 · Answer

I believe Graduate PLUS may now be taken out by students enrolled in an approved graduate program. The PLUS program, originally meant for parents, has now been amended to allow "creditworthy" students to also borrow money under its auspices. The interest rates on PLUS loans are fixed at 8.5%, the Stafford loans at 6.8% are therefore a better deal. However, I believe a student may only borrow up to $20,500 per year under the Stafford program, so it's likely a lot of us would need to dip into PLUS or private loans if we're looking to borrow more than $41,000 for an MBA. Some lenders, IIRC, do give incentives of up to 1.75% on PLUS loans, but the origination and guarantee fees can be pretty hefty at ~4%. Furthermore, if the credit crisis continues for much longer, we could expect these incentives to go the way of the dodo.

With Prime/LIBOR at substantially low levels, it makes sense for students who anticipate paying off the bulk their loans within 2-3 years of graduating, to actually consider private loans as opposed to the federal ones discussed above. However, how good a deal private loans end up being depends a lot on your credit history

For an example of a website that compares incentives offered by lenders, by loan type, see:  https://gmatclub.com/forum/p489529#p489529

cbreeze · Answer

Most lenders differ in these Stafford loans are the junk fees that they add on, origination fees, default fees and some will credit back some of these fees once you start repayment based on timeliness or auto-pay methods. That's the kind of information I think we should share. Lenders with the least fees.

Another one is the Grad Plus loans. Since most people require more than the $20,5000 per year cap by the Staffords, it would be nice if we can disclose which lenders have the best structures for repayment. Should one borrow at the fixed 8.5% set by Federal Grad Plus or the private loans at variable interest rates as solaris I indicated.

If anyone is actively looking at lenders, please share your information.

mbavacation · Answer

Since this post is already there for student loans, I thought I would ask this here.

What is the highest amount of loan one can get in terms of percentage of tuition + living expenses (family with 2 kids). Has someone actually received >90%?

cbreeze · Answer

If you are attending school in North Carolina, the College Foundation charges no origination fees, no default fees on their Federal Stafford Loans.
For Grad Plus Loans, the College Foundation has 3% origination fee but will credit back the 3% the following year.

Student loans, tell us your best deal

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