Grad plus vs Discover

[Dr Turkelton]

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Sorry if this is a dumb question but I am completely new to all this. I know people say to take Federal loans before any private loans. But I have a cosigner willing to sign my Discover Graduate loan meaning an interest rate of 5.5% compared with 7.9% for Federal. Is there any reason to pick Federal over Discover?

 

[RangerBob]

I'd always choose a federal loan unless the rate was much lower and/or you will definitely pay this loan off during the first year or two residency. Federal loans offer much more benefits--indefinite forbearance for residency (private loans might offer ~3-4, which isn't very helpful if you're in residency longer than that), IBR/PAYE for repayment plans, loan forgiveness (at least for right now), and will be dismissed if you pass away. That private loan will go to your cosigner if anything happens to you.

 

[Igor4sugry]

Sorry if this is a dumb question but I am completely new to all this. I know people say to take Federal loans before any private loans. But I have a cosigner willing to sign my Discover Graduate loan meaning an interest rate of 5.5% compared with 7.9% for Federal. Is there any reason to pick Federal over Discover?

Always go with private lender because of favorable loan repayment terms.

With a private company they give you three years and then you have to start payments in standard repayment. You will have very little control over this and if you don't have the money will take hit on your credit.

This applies to pretty much every residency that is greater than 3 years. There is a surgery resident on General Residency forum right now who has SalieMae private loans that are kicking in after 3 years in residency.