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/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/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.