Private vs. Federal Loans

[MP24]

I'm interested on everyone's opinions of the advantages/disadvantages of private vs. federal loans. I have heard about the loan forgiveness program and the income contingent repayment option for federal loans but it seems that if you have a high credit score that the interest rate is about twice as much for federal as it is for private loans.

What does everyone think? Is it a better/safer option to choose federal loans? Or private loans? Or, perhaps, it is best to do a combination of the above?

[rman1201]

I dont think there's ever a reason anyone should take out Private loans... the only case would be if you got into HYS and just went through a foreclosure and are ineligible for GradPlus.

Private loans don't offer the safety net of IBR and loan forgiveness in the event you don't do well, and they're still non-dischargeable, so you could very well be strapped with that debt for most of your life.

[TR Fan]

I fully agree with Rman. Having the flexibility of federal loans outweighs the lower interest rates of their private counterparts, to say nothing of the obvious benefits associated with federal loans should you go into public interest.

That being said, it wouldn't hurt to get some estimates from private lenders and learn more about their repayment options (with which I am admittedly less familiar).

[jaydizzle]

Stay away from private loans. I have have a lot of them from undergrad. If you become unemployed, they do not care. They do not care about anything. They get deferred while you are in school, but during the summer months many of them want payments. They also have forbearance and other crap options that you essentially have to pay for. It's like $100 or something like that if you can't afford to pay your loans to fill out a sheet and mail it to them so you don't have to pay for a couple months. This affects your credit score and can be done a limited amount of times. I want to get rid of my private loans asap, but unfortunately I do not see a way of doing it right now.