Taking advantage of the current LOW Interest rates

[picaso]

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As we all know federal loans both subsidized and unsubsidized have fixed interest rate of %6.8.
But U.S interest rates are quiet low now (%3.25) and have never been as high as 6 or 7 percent since early 2000s.
Assuming that you have good credit with good co-signers and you will qualify for Prime rate + 1 or Prime rate + 2 interest rate, is it a wise choice to forget about federal loans ( at least the unsubsidized portions) and go with private loan?

 

[HupHolland]

Absolutely not a good idea.

Federal student loans are fixed rate, private loans are variable rate. Your federal loan will still be 6.8% 20 years from now, but who knows what your private loan will be????

Hup

 

[picaso]

Absolutely not a good idea.

Federal student loans are fixed rate, private loans are variable rate. Your federal loan will still be 6.8% 20 years from now, but who knows what your private loan will be????

Hup

Thanks HUp for contributing. Here is the thing, the last time interest rates were as high as 8% was more than twenty years ago. So given the current shaky economy, it is possible that interest rates stay low by the time you finish paying off your loans.

 

[Nat426]

dont forget the federal subsidized loans that do not accrue interest while you are in school.

 

[HupHolland]

dont forget the federal subsidized loans that do not accrue interest while you are in school.

The OP was taking these into consideration.

To the OP: Sure, but to me the fixed rate is good peace of mind. Think about all the people during the real estate boom that financed their homes using zero down, variable rate mortgages. Good idea? I think not..

Attend the cheapest school possible, apply for as many scholarships as possible, hound your parents/grandparents for money--basically do whatever it takes to stay away from grad plus loans. If you need to take some out, whatever, you did your best. Live like a student. You can't do much more than that. To take out a variable rate loan, in my opinion, is foolish.

Hup

 

[Odontos2015]

I believe that if you die or become disabled, federal loans are forgiven while private loans would become the responsibility of your cosigner.