Student Loans...discounts

Question

I went around and found some discounts banks give on their student loans...these are for stafford and grad plus loans. Usually they give much better discounts on private loans, which right now have lower interest rates but those arent fixed. Origination fees also vary from bank to bank so thats another thing to take into account. The first 4 are Kellogg's preferred lenders (discounts may vary for different schools). If anyone has any others add them and I can add them to this post as a good point of reference. I will try to get a post together with origination fees. It might be fun to figure out monthly payments for max stafford loans using each. If I have time sometime in the future I will work on that.

Citibank:  Receive an automatic 0.50% interest rate reduction at repayment and qualify for an additional 0.25% interest rate reduction when you enroll in our auto-debit payment program.

Wells Fargo:  0.25% interest rate reduction when we automatically withdraw payments from a personal checking or savings account

Edamerica:  0.25% interest rate reduction for auto-debit

Access Group:  0.25% interest rate reduction for auto-debit

Bank of America:  0.25% interest rate reduction for auto-debit

Chase:  Automatic 0.10% off the statutory rate

Key Bank:  0.5% interest rate reduction for auto-debit

Wachovia:  (this one is confusing but Grad Plus is good)
-Staford: Instant 1.5% rebate (zero origination fee)
 • 1% rebate at the start of repayment 
 • 1% rebate after 12 scheduled payments
 • 1.5% rebate after 24 scheduled payments
-Grad Plus: 7.9% loans (refund origination fee)

nervousgmat · Answer

Nice post, river! What do you think about NW's loan option @ adjustable 7.5%?

riverripper · Answer

You can get much better rates from other places. Plus I read most of the privates will get readjusted downwards in a few months. I forget which might have been Chase but it was like 7.5 then 1% reduction, then 1% for e-bill. Some banks give big discounts on private loans if you have an account with them that they take payments from. If I was going into banking and would pay it off quickly I might go private but rates will definitely go up in the future so since I wont be paying it off in two years with my first huge bonus I will be taking the safer route.

mba2010 · Answer

Safer route...being one of the banks recommended by NW?

I think the 8.5% will go down in July based on the current state of the economy. In 2001, the federal rate went down to 1.5%. Doubt it'll dip that low, but still better than 8.5%

CfaMiami · Answer

whaaaaaaaaaaaat?

riverripper · Answer

MBA2010, someone told me that new loan rates dont adjust they were set by congress when they passed some law. The only rate that will change will be for loans distributed before 2007. I hope that isnt true.

mba2010 · Answer

My understanding is the gov't readjusts the federal loan rate every July. Maybe that's just for undergrad loans? If so, that BLOWS!

CfaMiami · Answer

River, MBA2010 and I have decided that you are the most "adult" of us, and should therefore do the research and tell us what to do. Thanks, Dad!

dabots · Answer

Cfa throwing out the real names

riverripper · Answer

Adam doesnt post here much so he doesnt get the secret nature haha.

riverripper · Answer

I think its for older loans...new ones are pretty much stuck at 6.8 and 8.5 until congress changes that or something stupid like that. I am far from an expert on this but thats my understanding.

I am trying to figure out distribution. What I borrow depends on when we sell our house and how much we make on it....and also what my wife's salary will be. If she makes good money we can skimp and live off of that without needing to touch savings at which point only tuition will need to be borrowed. I dont want to take out money and pay the 1-3% fees and then not need it.

mba2010 · Answer

Tell us what to do, Dad!

riverripper · Answer

MBA2010, is the old lady of our group I think :wink:

mba2010 · Answer

I may be the oldest in years, but it definitely doesn't make me the most mature!

You don't need to tell us how much to take, just from where and why. thanks.

nervousgmat · Answer

I am joining mba2010 and CFAMiami in their petition to dedicate river as our Kellogg Dad and tell us what to do with the loans:-)

riverripper · Answer

As the person that doesnt drink I am used to baby sitting drunks but putting me in charge of your financial futures is a lot of responsibility. Remember I am an engineer not a finance geek. Nervous, you, CFAmiami, and Apollo all work in finance and should be more up on this than I am.

nervousgmat · Answer

River, thanks for pointing out the fact that I am a finance person. :-D

As a finance person I have been working 14 hour days, so I hardly find any time to even search for an apartment to live in while in school. I haven't even had a chance to seriously compare loan options. I think since you volunteered to start a topic on student loans, I just assumed that you are doing extensive research on types of loans and vendors. While the option that might be best for you is not necessarily the best option for others, in general, a good deal on a loan is a good deal all around. I certainly do not need babysitting and really, the "dad" nomination was just to give you props for the research you are conducting and helping others on this board to narrow down their loan options. No one is going to take your loan suggestion and blindly follow it as we are after all intelligent people with heads on our shoulders. So i reassure you that while you are definitely helping us a lot, you are not deciding our financial futures.

riverripper · Answer

I am going to Mexico for the next week...I will start digging into this stuff more next week when I get back to you. I will call the fin aid office and ask about rates dropping in July too.

Student Loans...discounts

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