Using Graduate Stafford Loan for extras like apartment, etc... (Private loan?)

[transcend11]

I've been figuring out how to finance my first year of pharmacy school and this is what I found out about the different graduate school federal loans from www.staffordloan.com:

The maximum for the Stafford Loan is $20,500 per year (no more than $8,500 can be in subsidized loans)

The problem is I need a little more than that to pay for my on-campus apartment that is not through the school itself (not a dorm, etc).

My tuition itself will be about $14,600, but once including my apartment, food, textbooks, a computer, miscellaneous... I need about $30,000 total.


So I was looking at the Graduate PLUS loan that is supposed to cover any additional fees, but it sounds like it's for tuition only:

"The yearly limit on a Graduate PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $6,000 and you receive $4,000 in other financial aid, you could borrow up to but no more than $2,000."


So since my $14,600 tuition is cheaper than the Graduate Stafford Loans, it doesn't seem like the Graduate PLUS Loan would be worth anything for me.

Does this only leave me with choosing a Private Loan for the remaining money I need to have? There are many, many options... can anyone recommend the best, if this is the step I need to take?

Thanks!

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[SketchLazy]

I've been figuring out how to finance my first year of pharmacy school and this is what I found out about the different graduate school federal loans from www.staffordloan.com:

The maximum for the Stafford Loan is $20,500 per year (no more than $8,500 can be in subsidized loans)

The problem is I need a little more than that to pay for my on-campus apartment that is not through the school itself (not a dorm, etc).

My tuition itself will be about $14,600, but once including my apartment, food, textbooks, a computer, miscellaneous... I need about $30,000 total.


So I was looking at the Graduate PLUS loan that is supposed to cover any additional fees, but it sounds like it's for tuition only:

"The yearly limit on a Graduate PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $6,000 and you receive $4,000 in other financial aid, you could borrow up to but no more than $2,000."


So since my $14,600 tuition is cheaper than the Graduate Stafford Loans, it doesn't seem like the Graduate PLUS Loan would be worth anything for me.

Does this only leave me with choosing a Private Loan for the remaining money I need to have? There are many, many options... can anyone recommend the best, if this is the step I need to take?

Thanks!

Right now it might look like private loans would be more attractive because of low interest rates. But those low interest rates are contingent on two things:

1. Your own and your co-signer's credit
2. The LIBOR rate which is variable

When you consider these two things, the private loans become less attractive. Unless you have great credit and your co-signer has great/perfect credit, you will not be getting the low 6-8% interest rates that the Private Loan lenders are offering. What also makes the private loans risky is that most are based on the LIBOR rate (set by banks in London when they lend Euros). The rate was at a low during the economic down-turn in 01-03, but has steadily risen since then. By the time you get out of school in 4 years and are paying off these loans, the LIBOR rate could be very high and you might not be able to afford the high interest payments. Stay away from private loans unless you absolutely have to get them to make up your cost of attendance. The GradPlus loans will only have a marginally higher interest rate in most cases for people going straight from college to graduate/professional school because they won't have spectacular credit. The best part of that is that the rate will be fixed especially around graduation time when the European economy could be on an upturn from this slow-down and the LIBOR rate rises. Stick with the GradPLUS whenever possible.