Private Loans vs Grad PLUS Loans Forum

[pnic101]

I'm new to a lot of this, but I'm struggling to see why everyone seems to advocate the GradPLUS loan so much. Currently, with good credit (or trusting parent with good credit), private loans can be secured for at around 4% APR. GradPLUS is fixed at 7.9% Interest rates would have to go up an awful lot over the next few years to surpass 7.9 on average. Going to a school with a good LRAP program seems to negate the advantage of the loan forgiveness for those in public service offered by GradPLUS. Is the main advantage of the GradPLUS protection against possible soaring interest rates?

Thanks for any advice!

[dspit]

Yeah I been wondering that also.

[aPosseAdEsse]

I used to wonder, but then I thought about it longer and crunched the numbers. Check out my post: http://www.top-law-schools.com/forums/v ... 5&t=111904

I think the most persuasive argument is that Grad PLUS loans are elegible for income based repayment, and are fixed against the chance of rising interest rates. +With grad plus there are deferment (say you decide to go get a Ph.D. or LLM.) and I believe even forebearance (e.g. laid off for 6 mo. to a year) Private banks will not flex like this.

At some point, the economy is going to recover, inflation is going to rise, and the Fed will have to raise rates. I would rather know my loans for the next 10 years are fixed.

[pnic101]

Thanks for the informative post! This makes things much clearer.

Anyone else have thoughts?