yeah, i got my financial aid package yesterday. it's slowly becoming very real for me...and it's so exciting!
now whether to accept those unsubsidized loans...or try to find others with a lower interest rate..
That's my deliemma too. We can discuss it here to help everyone out. Obviously, take the $8,500 subsidized Stafford at 6% since you pay no interest while your in school. Now it becomes tricky, the rest of the loans for most people are going to be the $24,500 Unsubsidized Stafford at 6.8% and the rest of the costs is the Grad Plus Loan at 7.9%. The problem is that since Congress and the President in their great wisdom decided to lock in the Stafford rates in 2006, the rates are actually higher than the going rate for normal loans and even private student loans. There's actually little incentive to even go with the unsubsidized Stafford or Grad Plus because you can get better rates through private loans. Private school loans are tax deductible too, as long as you send a statement to the lender that the money is used soley for school purposes, but besides that, as a pharmacist you make too much to actually deduct the interest because it phases out. That only saves at most $750 since they cap the deduction at $2500, so it's not a big loss.
An advantage of the unsubsidized stafford is that there is no credit check to get it, if you have bad credit, it'll be hard for you to get the Grad Plus or a private loan without a co-signer.
Another advantage of the unsub Stafford and Grad Plus is that the interest is fixed. Most private loans are usually tied to either the LIBOR or PRIME rate. So for example citibank gives private loans for Prime minus 0.5%, so their current rate is 5.5%, much lower than the 6.8% and 7.9% plus there's no loan loan fee eating up your money. So the gamble is will the Libor or Prime rate go up enough to be higher than the fixed 6.8% or 7.9%. If I were to gamble, the answer is no, the prime will not go up that high.
In the end for convience, I would recommend anybody to take both the Subsidized and Unsubsidized Stafford loans and really consider not taking the Grad Plus but instead taking out a private loan tied to the Libor, not Prime and no loan fee. It'll save you thousands in the long run.
The only thing I can think of is: they apply to more than one schools, and they choose other schools over UOP. I don't think people would give up because of financial issue because before they apply, they already know the cost. Even though there are some people giving up their seats, I guess they have told the school earlier already. Why would they wait until so late?
