gradPLUS vs alternative loans

[mjh4]

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I've maxed out on my limits for Stafford loans for this year, and now need to turn to grad PLUS or alternative loans to supplement my budget. I'm having a hard time deciding between the two - does anyone have good insight to share that will help me make this decision? Unfortunately, my financial aid office is completely unresponsive, so any help from everyone out there would be really appreciated!

 

[Lesley]

I've maxed out on my limits for Stafford loans for this year, and now need to turn to grad PLUS or alternative loans to supplement my budget. I'm having a hard time deciding between the two - does anyone have good insight to share that will help me make this decision? Unfortunately, my financial aid office is completely unresponsive, so any help from everyone out there would be really appreciated!

Go with the Grad PLUS loan to meet any shortfall between where your Stafford Loans leave off up to your cost of attendance. Your school should supply you with a cost of attendance for the 2007-2008 school year. You will need that information when applying for the Grad PLUS Loan.The Grad PLUS loan is an unsubsidized loan with a fixed rate of about 8.5%. Alternative loans interest rates reset as the prime or libor rate changes. Stick with fixed rate loans whenever possible. Good Luck in school.

 

[mshheaddoc]

grad plus hands down. fixed at 8.5% is going to be hard to beat unless you have a co-signer for all your loans. 👍 Additionally they can be consolidated together as well.

 

[GrtWhtNrth]

I am going with Grad Plus. You can get a marked reduction in interest rates during repayment if you pay ontime and sign up for electronic debiting from your account (so you can bring the interest rate down from 8.5%). See below:

1 Interest Rate Reductions (IRR): a 0.60 percentage point interest rate reduction is awarded at first disbursement and retained for the lifetime of the loan; a 0.75 percentage point interest rate reduction is awarded at repayment and remains during active periods of repayment for as long as the borrower pays by the due dates as initially scheduled; a 0.50 percentage point interest rate reduction is available during active periods of repayment for borrowers who sign up to have their payments automatically deducted from a checking or savings account

The reductions are not nearly as substantial for the ALP.