US Loans Question

[hopefulvet21]

When Tufts sent me my fin. aid package it said I was eligible for $8500/yr in subsidized stafford loans, and $32,000/year in unsubsidized stafford loans. And then the rest was covered by GradPLUS and work-study. When I went on Edinburgh's website and looked under the US loans category, it said that graduate students are eligible for a max of $8500/yr in subsidized stafford loans. Then it said the total stafford loans limit (subsidized and unsibsidized) was $20,500...meaning that the max amount of unsub. stafford loans I can borrow is $12,000. Why does Edinburgh say $12,000 and Tufts give a figure of $32,000? Which is right?

here is the page I was looking at:
http://www.scholarships.ed.ac.uk/usloans/loans.htm

What am I missing here?

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[david594]

It might be an international thing? I know I was told the same thing regarding UPEI and I was never quite sure why.

 

[VAgirl]

When Tufts sent me my fin. aid package it said I was eligible for $8500/yr in subsidized stafford loans, and $32,000/year in unsubsidized stafford loans. And then the rest was covered by GradPLUS and work-study. When I went on Edinburgh's website and looked under the US loans category, it said that graduate students are eligible for a max of $8500/yr in subsidized stafford loans. Then it said the total stafford loans limit (subsidized and unsibsidized) was $20,500...meaning that the max amount of unsub. stafford loans I can borrow is $12,000. Why does Edinburgh say $12,000 and Tufts give a figure of $32,000? Which is right?

here is the page I was looking at:
http://www.scholarships.ed.ac.uk/usloans/loans.htm

What am I missing here?

The $20,500 sounds like the non-health professional students graduate limit, I think. So maybe if you go international the US gov't doesn't give you the benefit of being a health professionals graduate student? Or maybe it's an error? Unsure. Is there anyone at Edinburgh you can call?

EDIT: I just checked and $20,500 is the limit for non-health professions graduate students. Still don't know why that's the number that Edinburgh uses, but at least you now know where it came from.

 

[Klhughes]

I know at UT the amount they give us originally is lower than the total we end up getting. We start off with those lower numbers and then the lady at financial aid that is in charge of the vet students has to go through and change our numbers because we are allowed more unsubsidized loan money. It's something that I've had issues with the last 2 years because our financial aid lady isn't very good at her job.

 

[hopefulvet21]

I can't believe I didn't notice this or no one mentioned it before. At the reception they made a point that we were eligible for US Federal loans like any vet student here is. Looks like they forgot to mention the bit that you're awarded $20,000 less in federal loans than someone here! RVC's website has the max value at $20,500 too. This makes me angry. That means I'd need to take out $20,000 or more in GradPLUS loans at the higher interest rate. I haven't worked out all the numbers, but I have a feeling it would make a big difference on my loan repayment bills I guess I'll email them, but I think the original figure is right....ugh for almost a week I thought I knew I where I was going, now my plan is foiled!

 

[david594]

Yup That extra $20,000 a year is at 8.5% instead of 6.8%.

If you got that extra 20k a year in stafford loans you would graduate with ~$94,500 in debt from it.

I you take out 20k a year in grad plus instead, you graduate with ~$98,500 in debt.

Your monthly loan repayment costs for just this debt would be:

------------Stafford --------- Grad Plus---------- Difference
Monthly:
10year ___~$1087_______ $1221 _________$134/month

30year ___~$616________ $757 __________$141/month


And your total repayments would be:

------------Stafford --------- Grad Plus---------- Difference
Total:
10year __~$130,501 _____$146,551 _______$16,050

30year __~$221,784 _____$272,656 _______$50,872


It was this extra loan cost combined with the volatility of the exchange rate that made me forgo foreign schools.

If the USD=>GBP exchange rate were to go back to where it was less than a year ago, the cost of your education would increase 40%.

 

[VAgirl]

I can't believe I didn't notice this or no one mentioned it before. At the reception they made a point that we were eligible for US Federal loans like any vet student here is. Looks like they forgot to mention the bit that you're awarded $20,000 less in federal loans than someone here! RVC's website has the max value at $20,500 too. This makes me angry. That means I'd need to take out $20,000 or more in GradPLUS loans at the higher interest rate. I haven't worked out all the numbers, but I have a feeling it would make a big difference on my loan repayment bills I guess I'll email them, but I think the original figure is right....ugh for almost a week I thought I knew I where I was going, now my plan is foiled!

I would check with both someone in charge of federal student aid (Federal Student Aid Information Center (FSAIC), 1-800-4-FED-AID, 1-800-433-3243) and someone in charge at U of E before going too crazy. I looked at U of E's website, and the $20,500 number seemed to be for graduate students from the US, but they made no mention of vet students (maybe because the vet program is technically a "bachelors" degree or something?). But try to find a contact person and get some straight answers...maybe there's more to the situation.

 

[hopefulvet21]

David, thanks for doing those numbers...but I actually got $94,556.671 for the first scenario

Yeah, I am little annoyed, but I'll see what they have to say about it. Maybe it's a mistake on the website or it's outdated? I would still save a lot of money by going to Edinburgh over Tufts though. I don't need to pay for health insurance, car insurance, or a car at Edinburgh and I def need all of those at Tufts. Those alone already outweigh the difference in interest accrued.

The exchange rate is pretty volatile, especially these days...but even at the highest value the pound has been in recent decades, Edinburgh is still cheaper. Unless it goes significantly upwards of 2:1 (which it hasn't since 1980), then I think I'll be fine. And worst case scenario- it does go higher than 2:1- the amount I save this year will probably balance that out, since right now it is only about 1.5:1. Of course I'm only taking into account the tuition cost when considering the exchange rate, because with living costs you need to consider the Purchasing Power Parity.

In conclusion, applying for financial aid is annoying.

 

[hopefulvet21]

I would check with both someone in charge of federal student aid (Federal Student Aid Information Center (FSAIC), 1-800-4-FED-AID, 1-800-433-3243) and someone in charge at U of E before going too crazy. I looked at U of E's website, and the $20,500 number seemed to be for graduate students from the US, but they made no mention of vet students (maybe because the vet program is technically a "bachelors" degree or something?). But try to find a contact person and get some straight answers...maybe there's more to the situation.

Thanks for that #! I called it and got disconnected with the first guy, but then a man named Matthew was rather helpful. He said they have a "school code" so they definitely participate in some programs, but they may not participate in the program that allows extra aid for health professional students. He said they might, and it just may not be listed on the website. My guess is probably not though, since PEI and RVC are the same. He said I have to contact the school though (obviously). I guess since they are relatively new programs and they only started taking in lots of US students recently, they may not even be aware of this program or are currently working on getting involved in it or something.

Thanks for your help though guys!

 

[david594]

David, thanks for doing those numbers...but I actually got $94,556.671 for the first scenario

Now I feel like I totally wasted my time running those numbers. Since I just closed my spreadsheet, but that looks like the exact number I got assuming interest compounded yearly. When in fact I believe it is actually compounded quarterly for federal loans(so we both should have rounded up).

I was really just doing it to reaffirm my decision to decline my UPEI interview. Factoring everything in, I figured UPEI would cost me between $20k-80K additional over ohio in the short term and the risk was just too much for me. That even accounted for the cool canada only motorcycle I was planning to buy when I got there.

 

[hopefulvet21]

compounded quarterly!! this gets more complicated every ten minutes

We also did not factor in the 1-2% loan fee charge when it is disbursed. All this mess makes me want to get out the US even more, permanently!! UK students have the luxury of subsidized education and pay something like 2,000 pounds a year for their tuition! Between that and health care, I've had it with this country.

You'll be happy with Ohio, motorcycles are too dangerous anyway!

 

[VAgirl]

Now I feel like I totally wasted my time running those numbers. Since I just closed my spreadsheet, but that looks like the exact number I got assuming interest compounded yearly. When in fact I believe it is actually compounded quarterly for federal loans(so we both should have rounded up).

I'm a little confused about this compounding that you're talking about. It's my understanding (and I've had Stafford loans in repayment before, so unless I'm a real dunce, I think I would have noticed) that compounding doesn't really impact it.

You know, of course, that your loan capitalizes after you emerge from your grace period, about six months post graduation (capitalized means interest gets converted into principle and added to the principle balance, for those who are unfamiliar). But it was my understanding that as long as you're paying off the interest that accrues every month on your loan balance (and you basically have to, because they apply your payments first to any interest and outstanding fees), then there is no interest that's ever really outstanding, so nothing to compound or capitalize.

Someone please correct me if I'm wrong, but I'm 99% sure this is what happened with my Stafford (sub and unsub) loans from grad school. I can go check my records to be sure, need be...

 

[VAgirl]

then there is no interest that's ever really outstanding, so nothing to compound

I've been thinking about this more and thought of a situation in which you would have to deal with the compounding of interest owed. That would be if one pursued an internship or residency program and got a forbearance (I think that's what you'd get in that situation) where you don't have to be making payments but the interest is building up. In that situation (or a similar one where you're not actively making payments on your loan but have graduated) you would be subject to the compounding of your interest and therefore the growth of principle owed.

 

[david594]

Your probably right regarding the compounding. Something sticks out in my mind though that the interest acrues quarterly though.

 

[VAgirl]

Your probably right regarding the compounding. Something sticks out in my mind though that the interest acrues quarterly though.

I'm not sure how exactly the interest acrues, except that when I logged into my Sallie Mae page to look at my grad loans, there was pretty much a new, higher number for interest dollars owed every few days. Plus, every monthly payment I made a nice chunk went to the interest. So I think the juice is always running, as they say in movies.