<p>D is trying to make some decisions re grad school financial aid and unfortunately will be taking out BIG loans...it's professional school (Northwestern).</p>
<p>Their aid package was all loans (which we expected) but the confusing part is which lender(s) to choose. She is paralyzed by the choices and asked me to help. I confess to feeling overwhelmed after looking at the options:
She'll be getting Federal Grad PLUS, Stafford (subsidized and unsub), Perkins.</p>
<p>They provided a preferred lender list. After looking at all the details (origination fees, repayment incentives, etc), none really stands out. I am certain I am missing something obvious here. </p>
<p>The choices are Educamerica, Citibank, Access Group, Wells Fargo, and NU (for Staffords, Perkins--they ultimately sell to Sallie Mae). And, if she wants to make things even more complicated, she can choose a different lender for any of these loans except the Perkins.</p>
<p>Anyway, does anybody have any experience with any of these? Is it best to choose just ONE lender for everything if possible? Any recommendations?</p>
<p>My head is spinning after spending hours online researching. None of it's sinking in anymore. Help.</p>
<p>Ask what is the total cost of the loan after 5 (could be another value) years, with on time payments. Some lenders give discounts upfront, other give at backend, all have special conditions. </p>
<p>Your problem is like that of selecting a mortgage from a broker. Truth be told is that they (broker) really don't care which is cheaper for you but which makes them the most money.</p>
<p>I get that they all make money somehow...but in this case repayment incentives are similar with these as are the origination fees. She'll have 4 or five different loans at varying amounts and we can choose a different lender for each one--so that makes it very different from a mortgage. It's the "bundling" affect I'm wondering about. And frankly, the lenders themselves.</p>
<p>But if anyone else has words of wisdom regarding these lenders:
Eduamerica, Citibank, Access Group, Wells Fargo, and Northwestern,
that would be very helpful.</p>
<p>Have you tried posting this question on the "Graduate School" part of CC? There may be other grad students who have already dealt with this issue and can lend their insights.</p>
<p>We used Citibank/StudentLoanCorp/AES for undergrad and later for consolidation. We like the discount after 3 years of on time payments for the consolidation. We also have other business relationships with Citi. Again you need to discover what is it that you exactly want. All will have +/- 's and which +/- may make a difference for you but not for me. </p>
<p>If D is indecisive on which to take, she should look past the sale's pitch and look at the numbers for the loan. The same situation will arise later on any type of loan, auto, consumer, credit card, mortgage. She needs a basic understanding of personal finance.</p>
<p>For undergrad loan in Pennsylvannia, Citibank was the marketer, StudentLoanCorp (80% owned by Citi) was the underwriter, AES was the servicer, PHEA was the guarantor, the US Dept of Education was the subsidizer of the interest and ultimate guarantor for the loan, and the US taxpayer guaranteed the the US DOE subsidy payment. She only needs to know what the ultimate cost of the loan and the conditions for the loan.</p>
<p>As far as I know, Access Group is the only one on your list that is a non-profit. Loans don't really end up being with Access Group but rather with the agencies it funnels to. Most of my kid's loans came from the higher education authority of a state in which we've never resided. I don't know why. I don't think you can get your "private" loans through Access Group. In other words, I think they ONLY make Stafford, Perkins, etc. loans. </p>
<p>I don't know what your D's interests are and you're a bit vague about the kind of professional school she will attend. However, if it's law and if Northwestern has a loan forgiveness program, the CRUCIAL question is whether these loans are eligible for it. (In translation: many top law schools have programs which forgive repayment of all or a portion of your loans should you opt to go into lower paying jobs.) </p>
<p>You do NOT have to consolidate your loans with the same lender. I cannot begin to tell you how many companies called trying to get my kid to consolidate loans with them. Every Thanksgiving, Christmas, etc. holiday, those vultures called. </p>
<p>Also, especially on the "private" loans--those above the amount the fed government guarantees--check to see when you have to begin repayment. The amount of money you have to shell out the summer after law school (and presumably med school) is mind-boggling. Get as long a "breather" as you can. Just paying the interest those first months was tough. </p>
<p>The FinAid web site has some calculators for comparing loans with different kinds of discounts. With just about every kind of college financial question, I think they're great for laying the information out there and helping people evaluate their choices.</p>