Federal Loans

[higuys]

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I'm an MS4 and have been taking out federal loans for the past four years. I have tried to keep my loan requests to a minimum and have not taken the maximum available any year.

This academic year the interest rate for federal loans went down from 6.8 to 5.4%. If I have not taken the maximum available for this year, would it make sense to take out more loan money at 5.4% and immediately put it towards my earlier med school loans that have a higher interest rate?

 

[shoal]

Yes

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[Wolverines83]

Sweet idea bro. You just saved me some interest. I've been taking out very few loans and with this, I'll be basically refinancing.

good work

 

[Black Adder]

Don't forget about the nonrefundable 1.072% origination fee they will take if you take out the loan now.

 

[higuys]

Don't forget about the nonrefundable 1.072% origination fee they will take if you take out the loan now.

Good point. I may just hold out then.

 

[RangerBob]

Good point. I may just hold out then.

It's probably still worth it. Keep in mind whatever you pay off with the new loan is now "converted/refinanced" from 6.8% to 5.4% interest, so that's 1.4% in interest accumulation you save per year. Even more if you have GradPlus loans and you can pay of some of them with the new loan. Residency takes 3-6+ years, so that 1.4% (or more if paying off GradPLus) could save you a fair amount.

 

[shiftingmirage]

I'm wondering if you could sit down with someone in your school's financial aid office and discuss it with them? It sounds like a good deal on paper.

 

[higuys]

I'm wondering if you could sit down with someone in your school's financial aid office and discuss it with them? It sounds like a good deal on paper.

FYI I talked with some finaid people at my school who said it was a reasonable idea. I took out the remainder of my available funds as did some others in my class