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Nah, Stafford loans are still federal loans. The bank is sort've acting like a secondary market for the same product - still under federal guidelines, etc. Private loans are also known as alternative loans and are based on an extensive credit check. The interest rate is not fixed and there is no federal regulation to monitor the program (which there really should be, but I digress...) Federal loans are Staffords, Perkins, GradPLUS and PLUS loans. Private loans are everything else. As for the romantic fantasy...I could easily make bank off of the volume of private information coming across my desk every day, including checking account information. So I have to be very careful about just how appealing I let that idea become 
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Aug 28, 2008 21:44
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Groda posted:When you say "private loans," you mean, for example, Stafford loans taken through a private bank, right? Private loans are education loans obtained directly from the bank or other lender and have nothing to do with the federal government. They are separate from Stafford loans. Most people get private loans when they need more money for school than the government is going to loan them.
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Aug 28, 2008 22:50
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Hi Wiggy, I've been a long time lurker and just became a goon today! Here's my situation: I just graduated this August & have $70,000 in loans (30K being sub/unsubsidized Stafford Loans and the rest private loans). Interest rates vary anywhere from 4-8.5%. I'm assuming it would be wise to consolidate these loans as soon as possible? Any suggestions for companies to go through or what incentives to look for (besides interest rate reductions over principal rebate)? I'm starting a job mid September that pays $70,000 a year. In reading about student interest loan deductions (http://www.irs.gov/publications/p970/ch04.html) it seems I would want to contribute at least a couple thousand dollars to an IRA so my MAGI would be < $70K so I can take advantage of this deduction. The only thing is I was given stock options as a signing bonus, so would those count towards my taxable income? Given my upcoming Salary + Relocation stipend of $5K + Signing Shares + Being Single, how can I avoid being completely taxed to death by the IRS at the end of the year given my upcoming hefty loan repayments? Lastly, should I pay as much off as possible on my student loans every month, or should I make a moderate payment and invest the rest in an IRA/Savings(ING)? Thanks.
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Aug 30, 2008 09:15
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Welcome to the forums! Honestly, you should direct your questions to a financial/tax adviser. All that I can tell you is that student loan interest is deductible. Beyond that my knowledge spans into staring blankly. There is a tax guru goon lurking about somewhere who goes by furushotakeru . He offers a goon tax filing service and he's awesome. If you can find him, I suggest you try PMing him with your questions 
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Aug 30, 2008 11:39
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linted posted:Hi Wiggy, I've been a long time lurker and just became a goon today! Forget about the student loan interest tax deduction. You make too money for it to benefit you (which is a good thing). All it is is a $2500 deduction, i.e. you won't be getting $2500 back - and that's if you make below $55K. Federal and Private must be consolidated privately. You can consolidate your federal loans with the government themselves. For your private loans, fill out an application with Wells Fargo and see what they'll offer you for an interest rate. If you are a young guy you'll need a parent to cosign to get the lowest rate (equal to prime, currently 5%). There are no incentives anymore beyond interest rate deductions. I would suggest paying off your private loans as fast as possible - they have variable interest rates that are only going to go up as the feds raise the base rate. And a guaranteed 6-8.5%% return on your money in today's market is too hard to pass up.
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Aug 30, 2008 16:30
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Are there any decent alternate loans that you recommend? Any that are specifically for the gap between tuition and living? One of my roommates left unexpectedly, so I need a loan for room & board this year. I need a non-certified loan, if possible, as my financial aid office has refused/lowered PLUS loan amounts/certified loans on me before, so I really need to try to get this loan without involving them.
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Aug 31, 2008 06:15
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I don't have any particular alternative loan I recommend. I do know it's possible to have a private loan sent directly to the student, effectively bypassing the school, but I have only ever heard of this happening per the school's request and only for overseas students.
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Sep 1, 2008 02:47
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I'm still paying off my undergrad loans through AES, but I'm going to go back to Grad School in the Spring. Can I have my current loans deferred until I complete my grad school, then have all my loans from that consolidated at that point?
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Sep 2, 2008 21:45
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If you're going to a Title 4 school for graduate studies and will be at least half-time, your loans may be deferred. Call AES for the form you need to send them. You can also get a copy of your Verification of Enrollment from the school's registrar office. As for consolidating later, sure! As long as you have the balance to do so. Direct will likely not ever give up entirely on consolidations, so they should still be around when you're ready
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Sep 2, 2008 22:45
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Ok I know this is late because I didn't even think to look for a thread like this before I got one, but I just got a $25,000 loan from Sallie Mae at 8.5% (starting at that anyway.. I think it said it may vary). I'm just wondering if I'm going to get raped on payments in the near future because of this?
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Sep 2, 2008 23:35
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I am planning to transfer schools in the Spring. In order to go to the school that I want to I will have to take out loans to cover rent ect. Considering that most of my tuition and other fees are covered by the FAFSA would it be wise for me to take out about 15-20k a year to cover this or should I look for a school that is more local?
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Sep 3, 2008 03:05
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What's the difference between the consolidation types of extended fixed and extended graduated? Sorry, I just can't seem to find any information on this.
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Sep 4, 2008 18:38
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Wiggy Marie posted:I don't have any particular alternative loan I recommend. I do know it's possible to have a private loan sent directly to the student, effectively bypassing the school, but I have only ever heard of this happening per the school's request and only for overseas students. Mine just sent me a check for the full amount in less than a week (Chase), and they had my loan added to my online account immediately and gave me a year after graduation before I have to start repaying the loan. I just had to prove enrollment, and everything else was pretty straightforward. Would use again A++. The federal loans just institutionalize the practice of forcing students to take out loans, and they subsidize universities at the students' expense, so pecans to you, pecans to you, almonds to you, almonds to you, and so on and so forth. 
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Sep 4, 2008 21:18
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Varg, if that rate is variable it means it's a private loan. Maaaaany private loans do feature a full in-school deferment while you're attending classes, and the last I knew Sallie Mae was one of them. You should call and ask customer service about the program specifics, or consult your contract. Mister Slugworth, I'm going to fully admit that I am very biased towards taking out less debt. If there is a comparable education program nearer, then yes, I do believe you should use it. However, if you really want to transfer to this school, you will have to look at private loans. If you happen to be a graduate student, you can also make use of the GradPLUS loan. If not, maybe you can beg for PLUS loan help from parents. If neither of those is available, it's private loan territory. Tab8715, extended fixed means that they will extend your repayment schedule at a fixed payment for the entire time - unless you make a large lump sum payment and ask for a re-disclosure, that payment will not vary. Extended graduated means that your payment will start low and steadily increase. Normally you are paying interest-only at first (or very close to it), and every 2-3 years the payment will increase to begin including more principle. This is a good program to choose if you need a lower payment, but you will pay a TON more interest over the life of your loans. People who choose this plan should always pay above the payment if they can, to pay less interest that the repayment plan would have you pay. Catenoid, thank you!!! Private loans are very much so an area I'm not that familiar with, so I really appreciate you and anyone else who contributes to those questions. I hate to steer kids wrong. The federal loan program is still better than private loans by a long shot. If a lender's worth anything at all, it will beg its borrowers to get federal loans first and then discuss private loans. They are hated universally for a very good reason - when even the people who would benefit the most hate the product they're selling, that's a pretty bad sign. Private loans are not subjected to any regulations (and I very much think they should be, dammit!), and trust me, it shows. Ironically a lot of the problems that Cuomo found were directly tied to private loan industry practices, but they weren't even addressed by the bill which passed. Yey politics.
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Sep 6, 2008 14:31
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Yeah, with private loans, the work needed is far more if you want to be safe. The convenience and necessity of paying for college makes it okay, I think.
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Sep 6, 2008 15:04
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Awesome OP, learned quite a bit from it. Here's my situation: I'm going into what I hope will be my fifth and final year of school (first two for associates, transferred, three to complete decided major for BA), and I've got $7,500 out in federal loans and my mother is taking out $2,500 in a PLUS to help me out this year. Unfortunately, this is only going to cover my tuition expenses, not my living expenses. Is there a way for me to take out additional federal aid so I don't get screwed on interest rates in the long run, or am I looking at the wonderful world of private loans? If the latter is true, I've seen a lot of verbage on Prime rates and LIBOR. What are some of the key things I need to know between these two?
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Sep 8, 2008 06:48
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When consolidating my loans through direct, what account number am I looking for exactly? There are so many numbers, argh! EDIT : I can only consolidate "federal" loans through Direct correct? Gucci Loafers fucked around with this message at 01:37 on Sep 10, 2008 |
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Sep 10, 2008 01:26
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Lache, the school would need to be willing to certify a higher amount for the PLUS loan, or you can try to appeal to the financial aid office for additional funding. Beyond those options, you start diving into private loans. LIBOR-based interest rates are based on this: http://en.wikipedia.org/wiki/LIBOR PRIME-based rates are based on this: http://www.moneycafe.com/library/prime.htm Generally PRIME-based have lower rates than LIBOR-based, but this is not necessarily set in stone. Tab8715, are they asking for you account number with the current account holder? That's the only account number I could think of. And yes, Direct can only consolidate federal and Direct loans; private loans are another ballgame.
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Sep 10, 2008 21:46
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Catenoid posted:Mine just sent me a check for the full amount in less than a week (Chase), and they had my loan added to my online account immediately and gave me a year after graduation before I have to start repaying the loan. I just had to prove enrollment, and everything else was pretty straightforward. Would use again A++. Well, they do have a non-certified private loan, but my school isn't listed, as they don't participate in it. I'm at a loss of what to do, I've emailed my financial aid office twice this month, and I'm ready to kill them already... What most frustrates me is that they're well aware of myself and other students having this problem, but seem to offer no help.
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Sep 17, 2008 07:53
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Chouzan posted:Well, they do have a non-certified private loan, but my school isn't listed, as they don't participate in it. I'm at a loss of what to do, I've emailed my financial aid office twice this month, and I'm ready to kill them already... What most frustrates me is that they're well aware of myself and other students having this problem, but seem to offer no help.
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Sep 17, 2008 08:44
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Hi all, Question about School approved loans vs. Non Scholl approved. I called Wells Fargo today to see about a 2nd collegiate loan. They guy happened to bring up the fact with my first loan, the school refused to approve the amount which i had originally requested. He suggested that for this go around, rather then applying for the "Collegiate Loan", I apply for their "Student Connect" loan which does not require approval from the school and disperses the funds directly to me (apposed to directly to the school). The interest rate is basically the same as my first loan, and he insured me that the repayment turns were also the same. So is there going to be catch with this type of loan...? If not, why would anyone bother going with a "school approved" loan? Thanks
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Oct 2, 2008 01:15
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Make sure they get a copy of the contract to you asap and read the entire thing. That's where any catches would be found, if any exist. School-approved loans, for a long time, were the most common. It was actually kinda hard to find education-related loans that didn't involved the school. That's changing as the private loan industry slowly collapses in on itself, because schools delay processing and limit how much can be taken out - obviously not something many private lenders are happy about right now. It's tough times, kids. I hope y'all are getting the money you need!
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Oct 2, 2008 01:36
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Wiggy Marie posted:Make sure they get a copy of the contract to you asap and read the entire thing. That's where any catches would be found, if any exist. Ah, thanks Ok well as long as there aren’t any inherent no-no's about the non-school-approved loans. Ill make sure to read over the docs though before I commit.
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Oct 2, 2008 01:56
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I'm pretty sure this question is answered by the first post, but I just want to confirm that I'm on the right thinking track. I'm currently a first year full-time graduate student. I've taken out the full amount in a Stafford loan ($20,500). This will be sufficient. However, in my second year, due to internships, I may not be able to keep my part-time job, so I'm probably going to need more assistance - something to the tune of $8-10k in addition to the $20,500 Stafford limit. Judging from the first post, the GradPlus loan looks like my best bet to obtain this, and I have *decent* credit. Does this sound about right/feasible?
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Oct 2, 2008 05:04
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Wiggy Marie posted:It's tough times, kids. I hope y'all are getting the money you need! Fortunately I only have one semester left after this one and the federal loans will cover tuition and then some. I usually get private law loans through Sallie Mae in the amount of a few grand per semester to cover the rest. Do you think this economic recession/depression we're entering into will prevent me from receiving this latter type of private loan? I'll be able to pull-through luckily so I'm not too worried, but it would help to know if I should start planning with my parents(who would provide the small amounts of remaining money I need) if it is likely to be necessary.
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Oct 2, 2008 18:26
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68K, yep. Sounds like a great plan Jive One, the current situation is steadily killing off the private loan business - it's much harder to get one. Which is not to say impossible, just...much harder. My own company has just over a 1% approval rate, for instance. It's hard times because the requirements are now far stricter than they were before. Minimum credit requirements have shot up, along with tons of other ridiculous criteria. It's gotten awful, frankly.
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Oct 3, 2008 01:02
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I just graduated, and I have some subsidized student loans. However, I'm still a full time student (at a community college), so I'm pretty sure I don't need to worry about the loans yet. Do I need to do anything? I haven't heard anything from the lenders or my financial aid office.
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Oct 3, 2008 03:03
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One more question please, I'm torn between a Stanford subsidized loan and a private loan from Wells Fargo,(Interest on the WF loan prime + 5.~~% so around 9-10%) The reason i'm torn is because the Stanford loan is slightly less then what i actually need, and the "half now, half later" dispersement policy of the Stanford will end up conflicting with some outside plans i had for the $. So that leads me to my questions, Is it practice to think that after graduation i would be able to refinance that WF student loan down to a lower rate? Would it be smart to say split the loan between the Stanford and Wells Fargo?
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Oct 3, 2008 17:59
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Sointenly posted:So that leads me to my questions, Is it practice to think that after graduation i would be able to refinance that WF student loan down to a lower rate? Take the Stafford loan and don't get a private loan. The private loan will have a variable rate that's only going to up from here, Stafford is fixed at 6.8%. Unless you have amazing credit, you won't be able to consolidate the private under 6.8%. You don't pay interest on the stafford until you graduate (plus grace), the private loan starts gaining interest the day it's disbursed. Seriously this a no brainer.
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Oct 3, 2008 22:02
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Realjones posted:Take the Stafford loan and don't get a private loan. The private loan will have a variable rate that's only going to up from here, Stafford is fixed at 6.8%. Unless you have amazing credit, you won't be able to consolidate the private under 6.8%. Ya, I know the Stanford loan would be the obvious way to go... Its just that there are some extenuating circumstances that i had to consider. The pros of the Stanford are pretty overwhelming though. Sointenly fucked around with this message at 03:58 on Oct 4, 2008 |
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Oct 4, 2008 01:15
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quote:Due to new federal policy, while you the student are attending classes at least half-time or more your parents are automatically eligible for a PLUS in-school deferment!!! How/where do I get my form for this, and where can I learn where/how to send it in?
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Oct 4, 2008 03:24
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Jason18241 posted:How/where do I get my form for this, and where can I learn where/how to send it in? Im not sure exactly, but being that it is a federal program... maybe the FAFSA site?
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Oct 4, 2008 03:59
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Emasculatrix, you can always contact your lender and make sure they've received the verification of enrollment from your school. This information must be received before they can apply the deferment. Normally the process is automated, but it never hurts to double check! Jason18241, you should be able to get the form at the department of education's site OR your lender's website. It's the PLUS dependent in-school deferment. Thanks for the help, guys
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Oct 5, 2008 23:11
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Wiggy Marie posted:Jason18241, you should be able to get the form at the department of education's site OR your lender's website. It's the PLUS dependent in-school deferment. I haven't heard about this. Is it subsidized?
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Oct 6, 2008 03:24
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Unfortunately no, it's not subsidized so the interest is accruing. But it pretty much treats your parent's loan like an unsub loan in your own name, which is nifty.
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Oct 6, 2008 23:46
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I just ran a credit report to take a fresh look at my student loans and I've got a few questions that should be answered by reading back through this thread, but here's one I'm curious about at the moment. On the report, there are five separate entries for Sallie Mae, which I am assuming are the stafford loans I've picked up. The question is that when paying these back, will Sallie Mae send me five separate bills each month or will they consolidate them automatically?
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Oct 7, 2008 01:45
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They should consolidate them automatically. The only reason this wouldn't happen is if you have more than one due date on your account - but that's not common and would be a system error, normally. You can call and request the due dates aligned if it comes up
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Oct 7, 2008 11:55
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So I'm going back to school and to do so I'm getting my first student loan. How early should I apply for it? Or should I wait until closer to the semester? I'm pretty clueless.
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Oct 7, 2008 14:51
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Matt Cruea posted:So I'm going back to school and to do so I'm getting my first student loan.
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Oct 7, 2008 14:56
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Mein Eyes! posted:The question is that when paying these back, will Sallie Mae send me five separate bills each month or will they consolidate them automatically? They don't actually consolidate them, but you still only make one payment. Your one payment gets split up to each of your loans depending on the repayment terms of each loan.
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Oct 7, 2008 21:06
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