New student loan interest rate

[vayntraubinator]

So what's the new student loan interest rate?

http://www.washingtonpost.com/polit...12df0c-f46d-11e2-aa2e-4088616498b4_story.html

Particularly for direct unsubsidized loans (Stafford loans)?

Anyone know??? Also, does it apply to this year's medical school finances?

Thanks,

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[deleted503015]

"For the coming year, undergraduates would lock in an interest rate of 3.86 percent, with graduate students having a rate of 5.41 and PLUS loans at 6.41 percent. All of those rates are lower than the current rate."

5.41 for Staffords and 6.41 for Grad PLUS. Note that this fixed rate will apply only to the loans you take out this year, and the rate for next year's loans will be different.

Yes, if it passes the House.

 

[vayntraubinator]

"For the coming year, undergraduates would lock in an interest rate of 3.86 percent, with graduate students having a rate of 5.41 and PLUS loans at 6.41 percent. All of those rates are lower than the current rate."

5.41 for Staffords and 6.41 for Grad PLUS. Note that this fixed rate will apply only to the loans you take out this year, and the rate for next year's loans will be different.

Yes, if it passes the House.

lmao looks like you've got quite a few ways about knowing this (looking at your decisions based on loans)...Vanderbilt is an amazing school by the way so congrats

Would you advise taking out more loans this year, if next years were advised to be at a higher interest rate? (at 5.3% for the year would be better accumulated over 6 years, than maybe 8% for 5 years.)

 

[deleted503015]

lmao looks like you've got quite a few ways about knowing this (looking at your decisions based on loans)...Vanderbilt is an amazing school by the way so congrats

Would you advise taking out more loans this year, if next years were advised to be at a higher interest rate? (at 5.3% for the year would be better accumulated over 6 years, than maybe 8% for 5 years.)

Haha well UNC is awesome too! (And saves me 120k!)

Re: loans--it's not like you can borrow that much extra, and the news articles don't seem to think the rate should reach 8 for a few years (one story I read said ~6.5 then 7.1). Sooo not sure? I mean it might save a tiny bit of $$ but it would be an extra yr of interest right? Definitely not an Econ person :/

 

[SilverCat]

"For the coming year, undergraduates would lock in an interest rate of 3.86 percent, with graduate students having a rate of 5.41 and PLUS loans at 6.41 percent. All of those rates are lower than the current rate."

5.41 for Staffords and 6.41 for Grad PLUS. Note that this fixed rate will apply only to the loans you take out this year, and the rate for next year's loans will be different.

Yes, if it passes the House.

So 'lock-in' doesn't fix our (Class of 2017) interest rate at 5.41%? Ah well, at least it will be lower for a few years.

 

[vayntraubinator]

Haha well UNC is awesome too! (And saves me 120k!)

Re: loans--it's not like you can borrow that much extra, and the news articles don't seem to think the rate should reach 8 for a few years (one story I read said ~6.5 then 7.1). Sooo not sure? I mean it might save a tiny bit of $$ but it would be an extra yr of interest right? Definitely not an Econ person :/

but the fact that you got IN. hahaha good decision!. . I'm saving about the same by going to my state school over a private school. These loan interest rates will hopefully make it even more affordable

Any ideas when this will be signed in? I'm afraid to take out loans until its passed (I have until August I think??) Maybe I'm just being dumb:
http://www.whitehouse.gov/the-press-office/2013/07/24/statement-president-student-loans

 

[vayntraubinator]

So 'lock-in' doesn't fix our (Class of 2017) interest rate at 5.41%? Ah well, at least it will be lower for a few years.

I thought it would. If you take out a loan before then for this coming year...does it still apply? Or would you ahve to take the loan out after the bill is passed

 

[SilverCat]

I thought it would. If you take out a loan before then for this coming year...does it still apply? Or would you ahve to take the loan out after the bill is passed

Correct me if I'm wrong, but I think what they mean is that for this year--2013-2014-- the interest rate will be 5.4%. The money you take out this year will always have a 5.4 yearly interest capitalization. However, when you take out money next year--2014-2015--the interest rate will be higher.

It doesn't sound that great to me-- for the short term, the interest rates will be lower, but in the long run, they're going to increase (the undergrad cap will be 8.x %). That's quite a jump from 3.4%, and who knows if, later, they decide to remove the cap. It's pretty much the same deal that private loans offer.

It's going to net Uncle Sam 814 billion buckaroos, however. Not too shabby for them.

 

[vayntraubinator]

Correct me if I'm wrong, but I think what they mean is that for this year--2013-2014-- the interest rate will be 5.4%. The money you take out this year will always have a 5.4 yearly interest capitalization. However, when you take out money next year--2014-2015--the interest rate will be higher.

It doesn't sound that great to me-- for the short term, the interest rates will be lower, but in the long run, they're going to increase (the undergrad cap will be 8.x %). That's quite a jump from 3.4%, and who knows if, later, they decide to remove the cap. It's pretty much the same deal that private loans offer.

It's going to net Uncle Sam 814 billion buckaroos, however. Not too shabby for them.

whoa whoa. The 3.4% hike was doubled in early July on SUBSIDIZED loans. The majority of us (and students) med students take out the unsubsidized loans which were ar 6.8%.

Accordingly, Congress always intended to raise the subsidized loans, however with the unsubsidized loans (this includes the Stafford loans), the rate is going to go along with the market. So for this year it's DROPPING (keep in mind that this is the UNsubsidized loans--which we'll be taking out), to 5.4% of the market from 6.8%. It's confusing

I'm doing more research and they're predicting that it will raise a bit next year (not to 6.8%), but then during our junior year it may jump above that 6.8% ,...which would suck. But by that time we'd only have 2 more years to go until residency

 

[vayntraubinator]

Correct me if I'm wrong, but I think what they mean is that for this year--2013-2014-- the interest rate will be 5.4%. The money you take out this year will always have a 5.4 yearly interest capitalization. However, when you take out money next year--2014-2015--the interest rate will be higher..

that's right. but specifically for unsubsidized loans.

The subsidized loans increasing really doesn't matter, because I believe the subdizied loans are being paid by the government on the accumulating interest until you finish school

 

[deleted503015]

Quick note based on something written above--no interest capitalization (the interest adding to the principal) happens until after graduation. Interest accrues at 5.41 or whatever the rate is.

Thought based on that: if federal loan consolidation takes a weighted average of your interest rates to determine your new rate, if you get a chance to put any money towards your interest during school it would probably (and this is probably super obvious) be smart to wait until your fourth year (when you know all your loan totals and rates) and put that $$ to your highest interest loan before consolidating.

 

[vayntraubinator]

Thought based on that: if federal loan consolidation takes a weighted average of your interest rates to determine your new rate, if you get a chance to put any money towards your interest during school it would probably (and this is probably super obvious) be smart to wait until your fourth year (when you know all your loan totals and rates) and put that $$ to your highest interest loan before consolidating.

that's super smart!! thanks for the tip peanutz although I wonder how you'd specifcy that (??!!) ...guess we'll see when we get there

 

[deleted503015]

So I hate to resurrect this, but I think I was wrong above. According to my financial aid office since we are professional students this bill did not affect us and the rate is 6.8. The information about my loan from my servicer also says my rate is 6.8.