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- Jul 20, 2018
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So I'm entering M1 and trying to decide between federal and private loans. I already know that I am taking out ~$40,000 with the federal unsubsidized loan, now I'm trying to decide whether to take out the remaining COA with grad PLUS or with a private loan. Quick break-down of the loans:
private loan- 5.5% interest rate, fixed, no origination fee
Grad PLUS- 7.08% interest rate, fixed, 4.25% origination fee
Since the private loan has better rates I originally thought I'd go with that, but my school is strongly recommending I go with grad PLUS instead because of the flexibility in repayment options and the loan forgiveness program. From what I've read online and on SDN it seems like it's risky to rely on loan forgiveness given how few people have actually been approved. So my question is, given that the interest on the private and federal loans will capitalize at the same time and the private loan has lower rates, are there really any benefits that should pull me towards grad PLUS instead? Lots of people on SDN seem to recommend refinancing after graduation anyways to get better rates, so am I truly digging myself into a hole if I choose to take out ~$30,000 in a private loan?
Any insight is greatly appreciated, I definitely have a lot to learn about all of this.
private loan- 5.5% interest rate, fixed, no origination fee
Grad PLUS- 7.08% interest rate, fixed, 4.25% origination fee
Since the private loan has better rates I originally thought I'd go with that, but my school is strongly recommending I go with grad PLUS instead because of the flexibility in repayment options and the loan forgiveness program. From what I've read online and on SDN it seems like it's risky to rely on loan forgiveness given how few people have actually been approved. So my question is, given that the interest on the private and federal loans will capitalize at the same time and the private loan has lower rates, are there really any benefits that should pull me towards grad PLUS instead? Lots of people on SDN seem to recommend refinancing after graduation anyways to get better rates, so am I truly digging myself into a hole if I choose to take out ~$30,000 in a private loan?
Any insight is greatly appreciated, I definitely have a lot to learn about all of this.