<p>Perilous is right.</p>
<p>I looked at some private student loans and this is the loan rates for Chase today</p>
<p>[Current</a> Interest Rates - Chase Student Loans.com](<a href=“chasestudentloans.com”>http://www.chasestudentloans.com/private-student-loan/interest-rate.html)</p>
<p>Variable Interest Rate for Chase Select: 3 month LIBOR Index + a margin (margins from 3.40% to 9.25%) </p>
<p>Current 3 Month LIBOR Index = 0.54%</p>
<p>(LIBOR is London Interbank offered rate, an Index like the 10 year treasury)</p>
<p>So the minimum interest rate today is 3.4 +.54 = 3.94%
Maximum Interest rate today is 9.25% + .54 = 9.79%</p>
<p>LIBOR rates vary and have been as high as 6.778 in the year 2000 and 5.50 in June of 2006 (see link for rates over the last 10 years).</p>
<p>[3</a> Month LIBOR - Rate, Definition & Historical Graph](<a href=“LIBOR Rate | Current Libor Rate - Definition - History”>LIBOR Rate | Current Libor Rate - Definition - History)</p>
<p>Rest assured interest rates will go up and let us say they go up to only 5.5%. Even at the minimum level you will paying an interest rate 3.4 + 5.5 = 8.9%. Not all will get it at 3.4%. Most will pay a starting rate of say 5 or 6% which may still be less than PLUS loans but when interest rates go up, it will be much higher than a PLUS loan you could have locked in. And if you keep the loan for 10 years, history suggests that in the 10 year period you will pay more with private student loans than what you would have paid in PLUS loans. If you have good credit and expect to pay off the loans in 2-4 years after graduation then Private loans may be good, else you are looking at the same risk that homeowners took when the went for ARM’s rather than a fixed interest rate. And, private student loans are not dis chargeable in case of bankruptcy or death of signer.</p>
<p>Remember private student loans are equivalent to ARM’s in the mortgage industry. Do you want to take the risk?</p>