<p>Hi, I've read a few of the posts and I'm still unsure of what route I should take. I'm going to George Washington in the fall and part of my financial aid package are three loans:</p>
<p>The Perkins, the Stafford subsidized and the Stafford unsubsidized. </p>
<p>Should I stick with these loans (total of about 9k) or look elsewhere for better interest rates and plans, especially with the Stafford unsubsidized? </p>
<p>Basically should I just stay with what I've got or is there better out there? I don't want to waste my time if there aren't any better offers out there and someone else has already tackled this dilemma. </p>
<p>Another thing, if some loans start acquiring interest from the day they are disbursed (such as the Stafford subsidized) wouldn't it be better to go with a fixed rate interest credit card or something like that? If I save money on that route is the stigma of having more credit card debt vs. student loan debt still worth going the more expensive student loan route?</p>
<p>Thanks for any help anyone can provide!</p>
<p>Its not really a stigma on credit card debt vs loan debt. It is a matter of interest rates. I had a thread the other day looking at various private loans.....in every case the rates and terms are inferior to the gov't loans.</p>
<p>IMHO, if you need to borrow funds in order to pay your COA....Max out the gov't funds, before going with ANY private loans. I also have not seen a fixed rate student loan, if you have...please let me know, I would be interested in comparing it. </p>
<p>Finally, dont use a credit card to pay for schooling. The interest rates are killer.</p>
<p>I agree that for the student the Perkins and Stafford (subsidized and unsubidized) are the best and my daughter has all three. However, the PLUS loans for parents are another story. A fixed interest credit card offer at 4.99 clearly beats the PLUS loan at 8.5%. I think parents should give thought to these credit card loans if they have the option. I took out a loan on a card I already had for 4.99 for the length of the loan versus the higher rate with the PLUS.</p>
<p>collegemom, isn't the danger that it is not really a fixed rate credit card? It might be for today, maybe they stick to the fixed rate for upto 15 mos., but then with a 30 day written notice they can change that fixed rate to some other rate?</p>
<p>I think that NJ, the state that I live in, offers a parent loan called NJ class with a 6.25% rate (.50% less with automatic debit). The payback period is 20 years. Only NJ residents, or those with students in NJ colleges qualify.</p>
<p>perkins and subsidized stafford don't accrue interest or payment while you are in school. you can't beat the perkins rate of 5%. And while the stafford is 6.8% for this year (it's easy to find lenders that waive all the upright fees and points). and you can easily consolidate and refinance after you are out of school</p>
<p>Most private loans require immediate repayment and have interest rates at least as high as the govt loans.</p>
<p>I wouldn't turn down a nickle of Federal loan money. OTOH, the plus loan isn't great and parents might get a better deal from a home equity loan or a credit union, etc.</p>
<p>There are fixed rate credit card loans guaranteed for the life of the loan with the caveat that payments must be made on time. The 4.99 % loan I am using for 2007-08 tuition is guaranteed for the life of the loan. At this time the interest rates are better than home equity lines - of course the home equity interest is deductible on income tax. On the other hand, it is cutting into the equity in your home.</p>
<p>So, basically the consensus is always, always exhaust the federal loans before you decide to pursue private loans? I imagine it would be hard to beat the Perkins and the subsidized Stafford loan. The unsubsidized Stafford loan...maybe, maybe that can be beat but I don't know. I'll look around and if anyone has some more pointers that'd be awesome. </p>
<p>Some more background info - I'm an independent student because I'm an armed forces vet whose been overseas. I don't really qualify for the parent loan and I don't own a home so I can't dip into any equity there. </p>
<p>I'm also looking at scholarships but that is another thread.</p>
<p>Thanks everyone for the replies - if you have anything else, keep it coming!</p>
<p>northeastmom-
You're exactly right.
The NJClass loan is 6.25% FIXED for 20 years, less .5% for auto debit.
Only for NJ students (attending anywhere, I believe) or any student attending in NJ.<br>
We took one out last year, rate at 5.9% with autodebit. This years will be 5.75%. Either the student or the parent can be the borrower.
Hard to beat.</p>