<p>Hi--little bit down to the wire here, on college loan selection! :-)</p>
<p>Son needs a few thousand $ (about 5-7k) to fill in the $ not covered by his college scholarship (for books, fees, misc expenses, some dorm costs). </p>
<p>We're not doing ParentPlus, but have looked at Wells Fargo, Citi and Discover.</p>
<p>Just wondered if anyone had a recommendation? Probably going to pick a loan tonight; they all look somewhat similar (Discover seems to have no fees; otherwise same interest rate & discount for auto deduct, etc.).</p>
<p>Thanks, bbkitty! Hub & I will look it over tonight. Son has his govt loan (unsub) & everything else in place. Just need to fill in the gaps. Worst case scenario we’ll take $ out of the 529, but wanted to hold on to that until the market improved a bit.</p>
<p>Many private lenders–even the big names–stopped making college loans for several months starting last fall. Some just started coming back in May. Some lenders still are not making private college loans because they are now considered too risky.</p>
<p>Generally speaking, you’ll see considerably higher interest rates than in the past. The default rate on existing college loans is high and getting worse. There is no collateral. Banks claim to have had a rough year economically. (Haven’t we all!) </p>
<p>Even if parents with excellent credit ratings co-sign the loan, the borrowing rates for student loan are high. And rates are adjustable, usually tied to LIBOR, meaning they could go higher. But current borrowing rates for private student loans are still lower than fixed-rate Parent Plus loans!</p>
<p>Thanks, Mitdu. We got a quote for 6% from Discover (prime plus a certain figure–it could change, depending on the prime rate). Waiting to here from Wells Fargo (though, website harder to navigate – whole process took me about 3 hours; Discover, 45 mins – not sure if that means anything).</p>
<p>2boysima–I think that was LaMas (?) who went w/Discover also. I thought we had ‘good credit’ too, so not sure why our quote was higher than her 4.25. Oh well! Still better than parent plus at 8%. Plus, there’s the grace period while they are in school (& a few months after) before you have to start paying (unlike Parent Plus). </p>
<p>Glad we did this today! With processing, we’ll make the req’d deadline for room fees, etc. :-)</p>
<p>I agree that the current rate is fine. But many student loans are for 20 or 30 years. There is often no cap on interest rates on student loans made now or the cap is around 14%. </p>
<p>There are similarities to the low interest rates (ARMS) that attracted homebuyers a few years ago. The adjustable rates adjusted when the market got rough and suddenly the monthly payments were too high for many families. I hope we’re not making the same mistake with our kids’ college loans.</p>
<p>We had a Wachovia private loan for our son last year. They are no longer making private loans.</p>
<p>So we went with Wells Fargo for S’s loan, and Wachovia for sec/unsec Staffords for both kids. </p>
<p>D doesn’t turn 18 until August–so we had to borrow from the “Bank of Grandpa & Grandma” for what her Staffords/grants/scholarship won’t cover.</p>
<p>Jolynne,
I vaguely recall seeing your posts on the UT forum, is your student attending school in Texas? If so, the College Access Loan is offered by the Texas Higher Education Coordinating Board. There are 2 options -6% fixed or variable, currently 3.91%. It is in the student’s name, can be deferred until after school, the interest is not capitalized, & can qualify for Texas-based loan repayment programs. Info here: [url=<a href=“HHLoans”>http://www.hhloans.com/borrowers/calfactsheet.cfm]HHLoans.com[/url</a>]</p>