Private Loans

[theringworm]

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I just received my subs and unsubs loan packet from school. I got the max 8500 for subs. but they did not give me the max for unsubs. They shorted me by about $6,000. Is there anyway I can take out the full amount? If not I am planning on taking out a private loan, about $10,000 to pay off credit cards and such. I chose T.H.E. for my lender. Are they pretty competitive when it comes to Private loans as well? Is this a good idea? Thanks for your input.

 

[mpp]

Take the unsubsidized loans if you can get them. Ask for them. Paying off credit card bills with student loans is an Ok idea, but probably getting a 2nd job and paying them off is a better idea. Technically you are not supposed to use student loans to pay off credit card debt, but there is no check on this. Private loan terms, however, might not be that much better than the credit card. Although it might be a good idea for credit card bills, I certainly woulldn't borrow an extra $10,000 for "and such" unless it were for a new kidney or something equally important.

 

[hillofbeans]

We often focus on the $38,500 cap on sub/unsub Stafford loans, but there's another cap that's going to hit you.

Most of these educational lenders will only provide loans up to your Cost of Attendance. That includes all forms of financial aid -- Stafford loans, Perkins loans, AND private loans.

The cost of attendance at my state school is around $29000. Even though I haven't drawn the max in Stafford unsub loans, I can't get the extra $9k, even through private loans. Kind of bites, but very few educational lenders will offer you private loans above your COA (T.H.E. will not).

For any more money, you're going to have to head to a bank and take out a traditional loan. Much higher interest rates, no repayment breaks/perks, and almost certain that a co-signer is required. You'd be lucky to even find one that would let you defer payments until graduation.

This issue doesn't hit a lot of people because most med school tuition rates push the cost of attendance way above the Stafford cap. But in your case it just might not.

If you have kids, the school can raise your COA to include day care costs, medical bills, new computer. Kind of dependent on how much you can strong-arm the financial aid office.

 

[Scarlet_Fire]

There is also a 1-time loan many 4th year students have taken out to defray the costs of interviewing, moving, etc. It's commonly known as a 'residents loan'. I believe the maximum you can obtain is in the ballpark of $13,000, and the interest rate is somewhat higher than federal loans. I'm not sure if you can obtain this earlier than 4th year, or if this type of loan can be consolidated or not (my hunch would be not).

 

[Amicus]

The the above poster said is mostly right. stafford+schollarship+school based private loans= Cost of attendance. It cannot be greater.

But there are private loans that do not need to be autorized by the school for grad students of good credit, (or parents good credit), that have defered payments for four years.

look at the Education One loan from Bank One. Just type Education One in google. You can borrow up to 30K for any expenses, credit card bills included. But if you have 10K of credit card bills you will need a coborrower.