<p>My daughter is looking at $22,000 a year for school. She was granted $5500 in subsidized / unsubsidized loans, $2400 in federal work study and the balance in federal direct parent plus loans. Where do you recomend we start to look for the parent loans? Home equity is not an option. I looked at the Federal Parent Plus site and they are 7.9% fixed, would we find anything better than that? Sallie Mae is "LIBOR + 3.50% (3.85% APR) to LIBOR + 10.875% (10.48% APR)" Does that mean its 3.85 added to whatever the current bank rate is? Also, she is planning on being a teacher and would really prefer working in a high need area so I think she might qualify for the teacher loan forgiveness program which from what I've read only works on Federal loans probably not Sallie Mae??</p>
<p>From what I read, Plus loan is not 7.9%. It is 7.9 + 3 + 1 %. 3 % for processing and 1 % for default fees. It is 11.9%. Wow, if you are looking at $14100 per year for parent plus loan. You daughter will be having a minimum of 22000 of loan herself when she graduated assuming she borrows 5500 a year. Depending on where you are, teacher’s salary may not be very high in some area and hard to find job too. Good luck! Check into fine print when you read financial aid.</p>
<p>Wowser. You are looking at $14K a year for your share for a total of $56K for the degree. That is heart stopping. Can YOU afford this?</p>
<p>Are there any other cheaper paths? She didn’t qualify for Pell, I am surmising. </p>
<p>You do need to read, very carefully, the material on teacher loan forgiveness. Watch out for language like “candidate MAY qualify for . . .”. It would be awful to count on loan forgiveness and then find that one fell through the cracks with some exception. </p>
<p>The financial aid staff at the college or the Education Dept at the college should be able to help you with the details. </p>
<p>Meanwhile, I am worried about you, the parent. If there are not the resources to pay even some of the load right now (because it sounds like you are wanting to borrow the difference between Cost of Attendance minus her loans/work study), then how are you going to have the resources to pay off the loans in four years time?</p>
<p>Please know that you are on the hook for any Parent Plus loans taken even if she fails to graduate. Please be careful – and also look into any way she could shorten her college career (such as attending a Community College during the summer while living at home or testing out of classes). Good luck!</p>
<p>The plus loans are 7.9% fixed rate with an origination fee (which is like most loans)From their site:
"There are no set limits for Direct PLUS Loans, but you may not borrow more than the cost of your child’s education minus any other financial aid received, such as a Direct Subsidized or Unsubsidized Loan. The school will determine the actual amount you may borrow.</p>
<p>The interest rate for Direct PLUS Loans is a fixed rate of 7.9%. Interest is charged on Direct PLUS Loans during all periods, beginning on the date of your loan’s first disbursement. To find out more information on interest rates for Direct PLUS Loans, contact your loan servicer.</p>
<p>In addition to interest, you pay a loan origination fee that is a percentage of the principal amount of each Direct PLUS Loan that you receive. This fee helps reduce the cost of making these low-interest loans. We deduct the fee before you receive any loan money, so the loan amount you actually receive will be less than the amount you have to repay."</p>
<p>You can also defer loans and pay interest while your child is in school, some posts I’ve read elsewhere had said you couldn’t. I know someone who did this put paid interest and some principal online during the year.
I found when the loan is online, it’s very easy to pay even when payment isn’t due and keep track of interest,etc. </p>
<p>I thought I might need one this year, but the stafford’s are so low, I’m having my children take out the full amount and will help them pay them back during the next 2 years. The interest rate can’t be beat.
I also found making an account to your loans help make them “more real” to the student and we both keep the password to check on them.</p>