Now that gov't loans are unsubsidized, go private?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
Transferthrowaway
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Now that gov't loans are unsubsidized, go private?

Postby Transferthrowaway » Mon Aug 01, 2011 9:14 pm

With the debt ceiling ransom cutting subsidization of loans, is there any reason to NOT go with private loans if you are able to secure them?

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NYC Law
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Re: Now that gov't loans are unsubsidized, go private?

Postby NYC Law » Mon Aug 01, 2011 9:15 pm

IBR. Thats always been the main draw, not subsidized interest.

dabbadon8
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Re: Now that gov't loans are unsubsidized, go private?

Postby dabbadon8 » Mon Aug 01, 2011 9:16 pm

Transferthrowaway wrote:With the debt ceiling ransom cutting subsidization of loans, is there any reason to NOT go with private loans if you are able to secure them?


You 100% sure that was in the final version of the bill? Same start date and everything? Link?

One reason not to go private is IBR/LRAP which only covers federal loans.

Transferthrowaway
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Re: Now that gov't loans are unsubsidized, go private?

Postby Transferthrowaway » Mon Aug 01, 2011 9:17 pm

dabbadon8 wrote:
Transferthrowaway wrote:With the debt ceiling ransom cutting subsidization of loans, is there any reason to NOT go with private loans if you are able to secure them?


You 100% sure that was in the final version of the bill? Same start date and everything? Link?

One reason not to go private is IBR/LRAP which only covers federal loans.

What if someone is biglaw secure?

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Emma.
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Re: Now that gov't loans are unsubsidized, go private?

Postby Emma. » Mon Aug 01, 2011 9:20 pm

Haven't looked into thi,s but won't the cuts start for academic year 2012-13?

Transferthrowaway
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Re: Now that gov't loans are unsubsidized, go private?

Postby Transferthrowaway » Mon Aug 01, 2011 9:21 pm

Emma. wrote:Haven't looked into thi,s but won't the cuts start for academic year 2012-13?

To be honest, not sure. I was hoping to pose the question and find somebody who had already done the footwork.

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NYC Law
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Re: Now that gov't loans are unsubsidized, go private?

Postby NYC Law » Mon Aug 01, 2011 9:23 pm

Transferthrowaway wrote:
Emma. wrote:Haven't looked into thi,s but won't the cuts start for academic year 2012-13?

To be honest, not sure. I was hoping to pose the question and find somebody who had already done the footwork.


Yes, it kicks in after July 2012.

Transferthrowaway
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Joined: Sat Jan 22, 2011 9:40 am

Re: Now that gov't loans are unsubsidized, go private?

Postby Transferthrowaway » Mon Aug 01, 2011 9:23 pm

NYC Law wrote:
Transferthrowaway wrote:
Emma. wrote:Haven't looked into thi,s but won't the cuts start for academic year 2012-13?

To be honest, not sure. I was hoping to pose the question and find somebody who had already done the footwork.


Yes, it kicks in after July 2012.


So...gov't loans for 2L, private loans for 3L?

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NYC Law
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Re: Now that gov't loans are unsubsidized, go private?

Postby NYC Law » Mon Aug 01, 2011 9:25 pm

Transferthrowaway wrote:
NYC Law wrote:
Transferthrowaway wrote:
Emma. wrote:Haven't looked into thi,s but won't the cuts start for academic year 2012-13?

To be honest, not sure. I was hoping to pose the question and find somebody who had already done the footwork.


Yes, it kicks in after July 2012.


So...gov't loans for 2L, private loans for 3L?


If you have an SA with a good offer rate that doesn't sound like an awful idea.

duckmoney
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Re: Now that gov't loans are unsubsidized, go private?

Postby duckmoney » Mon Aug 01, 2011 9:31 pm

The federal interest rates, subsidized or not, are TERRIBLE compared to private loans. They're currently set at 6.8 and 7.9% at a time when home mortgages are going for like 4%. My brother got a co-signed private loan at like 1% interest. They're outrageously low cost.

The ONLY benefit of federal loans is IBR and PSLF. If you feel confident that you will be able to repay the loans with a job you find in the private sector, the private are loans are the way to go. If you think you might ever have income that is too low to repay your loans or will work in the public interest, then federal loans are better because repayment is based on income and, in the case of public service, are discharged after 10 years.

HowdyYall
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Re: Now that gov't loans are unsubsidized, go private?

Postby HowdyYall » Mon Aug 01, 2011 9:39 pm

duckmoney wrote:The federal interest rates, subsidized or not, are TERRIBLE compared to private loans. They're currently set at 6.8 and 7.9% at a time when home mortgages are going for like 4%. My brother got a co-signed private loan at like 1% interest. They're outrageously low cost.



this can't be right. aren't most private loans LIBOR + a percentage with or without a cosigner?

duckmoney
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Re: Now that gov't loans are unsubsidized, go private?

Postby duckmoney » Mon Aug 01, 2011 9:43 pm

HowdyYall wrote:
duckmoney wrote:The federal interest rates, subsidized or not, are TERRIBLE compared to private loans. They're currently set at 6.8 and 7.9% at a time when home mortgages are going for like 4%. My brother got a co-signed private loan at like 1% interest. They're outrageously low cost.



this can't be right. aren't most private loans LIBOR + a percentage with or without a cosigner?


1% may have been an anomoly, my parents have really great credit so that probably helped, but LIBOR (along with pretty much every other interest rate indicator) is at a historical low right now and will probably only drop down further with this debt crisis mess. Anyone with anything but terrible credit should be able to get a private loan for much less than 6.8%.




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