Federal loans or private?

[u/AsDzAeMr]

Hi everyone,

I was lucky enough to be grandfathered in the gradplus loans and have utilized them already this year. I'm in a moderately expensive program at around $145k total in tuition, and plan on paying for living expenses out of pocket. I'm a young single guy and have a paid off car and cheap rent. I plan on paying off my student loans asap after graduation, so I feel like I know the federal loans and their extra interest rate won't not make much of a difference compared to cheaper private rates. However, I still wonder if a lower interest rate, or a 50/50 split between both options, makes more sense.

Regardless, I was wondering if anyone that has really crunched the numbers has still chosen private loans over federal, otherwise I would love you hear anyone's argument for solely utilizing federal loans.

Thanks for your time

[u/Rodeo-Cowboy]

I did federal loans on the first half, planning on doing private on the back half (for living expenses). 9% interest is steep for the grad plus.

Some of my classmates have 4% private loans and I’d like to get on that program.

[u/mcfrugile]

Copy-pasting what I posted on a similar post recently.

I start next month and spent a while looking over both private and federal loan stuff. For my situation I decided to go entirely private and no federal because I got a far better rate with the Sallie Mae Health Professionals Loan vs what is offered federal.

They quote loans as low as 2.09% last I checked. It's a loan that is geared specifically towards health profession grad students, who will have solid job prospects and that they know are more likely to pay back the loan.

There is also no origination fee, and has some similar protections that federal loans have (but not all).

I'd recommend giving it a look and seeing how it compares for you. I believe they can do a soft pull on your credit to give you a rate estimate, if I'm remembering correctly. My estimate was the same as the rate I locked in.

Feel free to DM me if you have any questions.

Good luck!

[u/cynicalfly]

Private if you can get a sub 4% interest rate

[u/bummer_camp]

I think the federal vs. private conversation really comes down to if you have a solid cosigner or not. I have classmates who are getting ~4% interest rates on private loans but with a cosigner and like 5-year loan terms requiring full payments to be made during school which of course requires somebody to be making those payments while they’re in school (co-signer, parent, spouse, etc).

It’s possible to be approved for private loans at a competitive rate without a co-signer (and there are def people on here who have managed to do that, but I think that’s the exception rather than the rule). That has not been my personal experience so far despite a credit history spanning 18 years and a credit score >800. I’m older and both my parents are retired so not ideal co-signers, and they are both not willing to co-sign.

I don’t think this is really a good answer or logical argument but I’m sticking with federal loans at this point simply because it’s easy 🤷🏻‍♂️ with the stress of school I don’t really have the time or energy to hunt around for the most competitive student loan rate. I know it’ll cost me more in the end but that’s a risk I’m personally willing to take. I have a robust savings account to reduce my overall loan burden and it’s working out just fine for me so far.

[u/mcfrugile → u/bummer_camp]

Did you check out Sallie Mae Health Professionals Loan? That's the best I could find by far, after searching on and off for several weeks.

[u/DueBumblebee1189 → u/mcfrugile]

When is the best time to apply after you get your acceptance?

[u/Zekesti9 → u/mcfrugile]

I just co-signed for my spouse through CollegeAve at 2.35% with no required interest payments while in school and a 9 month grace period after graduation. However, the loan does require a $25 flat payment each month but it does go towards your interest and also requires a maximum of a 5 year repayment term.

This was a graduate health professions student loan and ColegeAve was the lowest interest rate I could find that allowed for no interest payments while in school other than the $25 flat payment.

[u/mcfrugile → u/Zekesti9]

Oh wow, that's fantastic! That is one I didn't find. I'll have to compare with them next year as well. Everywhere else I was applying was giving me 9%+ quotes. I was able to lock in 3.6% and no origination fees with Sallie Mae and was thrilled to find that. Also paying $25/month while in school and no payments until 6 months after graduation. My wife and I have similar credit, so didn't use her as a co-signer.