<p>Between Stafford loans, Perkins loans and private loans, is there an actual dollar amount where a private lender says your student loans can only total X amount and this is all we can give you?</p>
<p>Someone had told us that our son should take out as much as needed in his name as he could get better loan repayment options and we would just help financially when the payments are due. Opinions?</p>
<p>[FinAid</a> | Loans | Student Loans](<a href=“Your Guide for College Financial Aid - Finaid”>Student Loans - Finaid)</p>
<p>Don’t have your son take out private loans!!! Just have him take out Perkins/Stafford.</p>
<p>Private loans have killer interest rates… DON’T DO IT!!!</p>
<p>Not to mention all sorts of weird penalties.</p>
<p>Seriously, if you child is borrowing the max on Stafford, sub and unsub and Perkins that is enough debt! Do not do Private Loans. You can take out a PLUS loan up to the COA - it’s a better deal.
here is a comparison between PLUS and Alternative Loans:
<a href=“http://www.pheaa.org/educationalloans/pdf/PLUS_vs._Alternative_Loans.pdf[/url]”>http://www.pheaa.org/educationalloans/pdf/PLUS_vs._Alternative_Loans.pdf</a></p>
<p>A comparison between Stafford and Alternative Loans:
<a href=“http://www.pheaa.org/educationalloans/pdf/Stafford_vs._Alternative_Loans.pdf[/url]”>http://www.pheaa.org/educationalloans/pdf/Stafford_vs._Alternative_Loans.pdf</a></p>
<p>The person talking to us was comparing the Parent PLUS loan with a local credit union’s private loan. The credit union has no origination fees and the current interest is cheaper.</p>
<p>“current interest” is cheaper but the PLUS has a 9% cap by law. </p>
<p>be careful. very careful.</p>
<p>See this article in the New York Times about an aspiring lawyer with $400,000 in student loan debt, including penalties</p>
<p><a href=“http://www.nytimes.com/2009/07/02/business/02lawyer.html[/url]”>http://www.nytimes.com/2009/07/02/business/02lawyer.html</a></p>
<p>Granted, this is an extreme case, but he graduated from law school in 2004 with $230,000 in student loan debt, and has never made a single payment on his student debts (!).</p>
<p>If there is an upper limit on student loan debt, it is probably much higher than is wise to accumulate.</p>
<p>The lawyer above took a long time to get finished with his education. His first student loan was 26 years ago, he is 47, and never made a single payment in 26 years. While he is a new law grad, he was not a conventional student. However, his attitude was to borrow all he needed, because some day he could pay it all off. </p>
<p>I also agree that alternative private loans to the student is not the preferred way to go. Stafford subsidized or unsubsidized, Perkins, then PLUS.</p>
<p>Please see the points raised in this thread: <a href=“http://talk.collegeconfidential.com/financial-aid-scholarships/743865-student-vs-parent-loans.html[/url]”>http://talk.collegeconfidential.com/financial-aid-scholarships/743865-student-vs-parent-loans.html</a></p>
<p>Currently, if parents w/ good credit scores cosign a private student loan through Discover, the interest rate is only 4.25%, with no 3% origination fee, no guarantor fee, no fees of any sort. Granted, that rate is likely to increase some over the next few years, but it would have to go up a heck of a lot for the private loan to be as expensive as a PLUS loan, with its 8.5% interest and the 3% origination fee. </p>
<p>Yes, private loans CAN be expensive - but for those w/ good credit ratings, this is not currently the case. Once the student has obtained his/her allotment of Stafford and Perkins loans, the PLUS terms look pretty crappy. </p>
<p>Anyone have experience w/ this?</p>
<p>We did 1 Discover loan and got that low rate. D’s unsub. Direct student Loan is 6.25% and we have to pay the interest now. However her grant was attached to taking the loan so we did it. She chose a pricey school then transferred to another pricey one and will have a lot of debt. We have a very high EFC (both work FT and have saved and saved, probably dumb) so there is very little free money coming our way.</p>
<p>As a financial aid officer, I see students racking up huge amounts of debt. I work at a relatively inexpensive state U … I can’t even imagine how much debt students at pricier schools are taking on. I strongly advise against taking on a large amount of debt. There are less expensive alternatives, and the education is still good … the student can make an okay school a great one through hard work, contact with profs, research, internships, out of class experiences, etc. All of these things are free.</p>
<p>In the end, how much debt to take on is a personal decision. Just remember that it is not NECESSARY to go into a lot of debt to get a good education.</p>