Help -- thoroughly confused...

[bruinrab]

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OK, so I'm looking at my financial aid award info. And I'm thoroughly confused by what's there.

1. Next to the Subsidized Stafford award, T.H.E. is listed -- do I have to borrow from them for this loan?


2. No lender is listed next to the Unsubsidized Stafford -- can I pick anyone I want?


3. I have three "alternative" loan options:

a. MedPreferred -- no origination or guarantee fee listed, but that doesn't mean there isn't one. Interest is variable in school (LIBOR + 4.5%)

b. MAL (MedCap) -- no origination fee, 3% added to the principal balance when repayment begins. Interest is determined by credit rating at time of application (my credit is good).

c. T.H.E. (PNC bank) -- 4% added when the money is sent to the school, 2% added to the principal when repayment begins. Interest is T-bill plus 2.5% in school and T-bill plus 2.85% during repayment.

My first instinct is to go for the MAL from MedCap -- is that the best deal from these options? Are there better terms available if I find a loan myself? Can I even do that?

😕

 

[mpp]

Can't help you too much with those alternative loans...not sure I understand what you mean by 2% added to the principal, etc. If it were me, I would go with a note tied to the T-bill instead of Libor (it is less volatile than LIBOR) or a fixed rate if that is what you mean by choice b provided it is low enough (anything under 6% would be very attractive for a fixed-rate private student loan).

As far as the Stafford loans, if they have a lender listed, you must have picked it (did you complete your Master Promissory Note? That is where you enter your lender code). The school should not have a specific private lender chosen for you as that is against the Department of Education rules...they are not even supposed to choose one for you if you ask them to...they can only provide you with a 'preferred lenders' list. You can choose anyone you wish for your Stafford loans unless your school is a Direct Loan school, then you have no choice.

 

[bruinrab]

Can't help you too much with those alternative loans...not sure I understand what you mean by 2% added to the principal, etc. If it were me, I would go with a note tied to the T-bill instead of Libor (it is less volatile than LIBOR) or a fixed rate if that is what you mean by choice b provided it is low enough (anything under 6% would be very attractive for a fixed-rate private student loan).

As far as the Stafford loans, if they have a lender listed, you must have picked it (did you complete your Master Promissory Note? That is where you enter your lender code). The school should not have a specific private lender chosen for you as that is against the Department of Education rules...they are not even supposed to choose one for you if you ask them to...they can only provide you with a 'preferred lenders' list. You can choose anyone you wish for your Stafford loans unless your school is a Direct Loan school, then you have no choice.

OK, I think I was confusing as well as confused. 😛

I wasn't sure about the 2% added to principal at repayment, but it didn't sound good to me.

On private loan b, the rate is variable but dependent on the student's credit rating. It's also tied to the T-bill.

I'm pretty sure I didn't pick a lender for the Stafford Loan, so I think I'll have to call the school up and see what's happening with that. Hopefully then I'll have an idea of what's going on. I was just hoping to be able to get all of this done over the weekend. 🙄