Does this loan seem sketchy?

Paying for College
1

<p>I was calculating several things and it turns out I have to take out a loan.</p>

<p>I was offered $5550 (Federal Direct Subsidized Loan), $800 (Federal Direct Unsubsidized Loan), and $1400 (Hawk Loan) from my school for the whole academic year.</p>

<p>I know I am definitely going to avoid the Federal Direct Unsubsidized Loan because it accumulates interest.</p>

<p>However, I can not decide if I should take out the Federal Direct Subsidized Loan or Hawk Loan. </p>

<p>I tried looking up information about the Hawk Loan and it is a special loan tailored for students of the university. </p>

<p>However, I do not know how to interpret the information I found.</p>

<p>Hopefully, someone can give me some feedback that will help me make the best decision.</p>

<p>This is what I found out about the loan: Types</a> of Aid: Freshmen Undergraduate Students</p>

<p>Thank you in advance!</p>

2

<p>Why do you think a loan flowered by your university is “sketchy”. To me, that means the loan is questionable. What exactly IS your concern about this loan?</p>

3

<p>The interest rate on this loan is ZERO percent. All you’re expected to repay is exactly the same amount you borrowed. The only restriction is that it must be paid back within 5 years of graduation. Those are about the most generous repayment terms I’ve ever seen . . . the only other place a student might get terms that good is from a generous relative.</p>

<p>I’ll repeat Thumper’s question: What exactly IS your concern about this loan???</p>

4

<p>

Zero percent interest rate! Too bad you could only borrow $1400.</p>

5

<p>Thank you again, everyone!</p>

<p>I have always been under the impression that private loans are “bad” and should not even be considered. </p>

<p>However, all you guys have put my mind at ease. </p>

<p>So, just to clarify, it would not make a difference whether or not I accept the subsidized loan or the Hawk loan, right?</p>

<p>I really appreciate your responses!</p>

6

<p>

See [College</a> Loans: Private Vs. Federal](<a href=“http://www.investopedia.com/articles/younginvestors/09/private-or-federal-student-loans.asp]College”>Private vs. Federal College Loans: What's the Difference?)

However, Hawk loan is not a typical private loan.</p>

7

<p>The Hawk Loan lender is UCI. UCI is a public institution, this is not a private loan. Here’s more info: <a href=“https://www.fs.uci.edu/loans/Loansumm/Hawk.htm[/url]”>https://www.fs.uci.edu/loans/Loansumm/Hawk.htm&lt;/a&gt;&lt;/p&gt;

<p>No interest, no origination fees.</p>

<p>You stated you are deciding between the Fed sub and Hawk. Do you only need $800? Only around that amount for each of your 4 years? </p>

<p>While there is no grace period after graduation, you only need to pay $90 per quarter to stay current for repayment.</p>

<p>The Hawk loan looks like a good deal to me for the small amounts you appear to need.</p>

8

<p>^See [Federal</a> Versus Private Loans | Federal Student Aid](<a href=“http://studentaid.ed.gov/types/loans/federal-vs-private]Federal”>http://studentaid.ed.gov/types/loans/federal-vs-private)

</p>

9

<p>The Feds’ definition of a private loan is not necessarily the mainstream definition. </p>

<p>They also say: “Federal student loans include many benefits (such as fixed interest rates and income-based repayment plans) not typically offered with private loans. In contrast, private loans are generally more expensive than federal student loans.” In this case the so-called “private loan” offers more favorable terms than the federal loans, not worse.</p>

10

<p>Thank you again, everyone!</p>

<p>I will probably lean towards accepting the Hawk Loan.</p>

<p>:)</p>

11

<p>Good for you for being cautious and double-checking. You have a good head on your shoulders, KT.</p>

12

<p>Thank you, gladiatorbird!</p>

<p>:)</p>