<p>From your experience or knowledge, what is the best way to deal with parents' loans over a 4 year period?
- would it be better to borrow the expected amount from the beginning, or only as much as needed from year-to-year?
- after grad school, what you do for the remainder of the term of the loans? Consolidate into another loan, or keep paying until the last loan is payed off?</p>
<p>I would not borrow more than you need at any one time. </p>
<p>Most Plus loans have to be repaid starting pretty quickly after disbursement, so taking out 40K if you only need 10K is not wise imo. I guess if you were going to have the extra money invested and making more interest than the loan, then it could make sense.</p>
<p>Against the rules for borrowing more than you need for current school year. You may borrow up to the cost of school but not more. School must qualify you for federal loans and max amount. </p>
<p>If you by chance are able to borrow more than the allowed federal guaranteed amount, (I believe from all sources) the excess is penalized, taxed, federal guaranteed loan called, and no further loans will be forthcoming. IOW, the penalty is severe.</p>
<p>^^ i think he is talking about private loans not govt ones</p>
<p>^. Now is a good time to obtain the form for PLUS, Stafford loan forms. downloadable, printable. Do read the fine print, and infact if you do online form, you cannot file until you do a hard print of the terms. </p>
<p>and no I am not talking private loans, but loans that we as citizen/taxpayers offer to all legal resident students.</p>
<p>Thanks for your replies. From your experience, is it better to borrow [PLUS] through the school, or get a private [local bank] loan? I guess all variables being equal [%rate, term, sum], it comes to account management. Any other issues to consider?</p>
<p>You will want to compare the two loans...PLUS and private. Sometimes, a bank or credit union is able to make a better offer on the loan terms. Just be sure to compare all the fine points of each loan.</p>
<p>After talking to the school's FA office, it appears that they use the Fed Direct Plus loans [7.9% vs. 8.5% private(with some conditions, you can get down to 8%, or 7.75% with auto payment)].
Regarding the time of application for the PLUS loan, it was recommended not earlier then 120 days before first install [due to credit check validity period].
The first payment is due 60 days after the loan is "fully disbursed", which in my case means after Spring semester is disbursed.</p>