Predicting Interest Rates for Loans for 2014-2017

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Winter is Coming
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Predicting Interest Rates for Loans for 2014-2017

Postby Winter is Coming » Fri Feb 07, 2014 11:27 am

I know its not really possible because they're tied to the treasury rate now, but does anyone have any good guidance/sources on the predicted rates for Stafford and Plus loans for the next three years.

There's obviously a huge difference between debt at 6% and debt at 10% when you're talking law school debt numbers and its really hard to plan properly having no real idea of what my actually loans are going to be locked in at.

Thanks in advance.

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cotiger
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby cotiger » Fri Feb 07, 2014 11:54 am

The 10-year treasury note closed at 2.7 yesterday. That's a 7.3% rate on GradPLUS and 6.3% on Stafford.

If the economy continues to improve, they will likely rise. No one will be able to accurately predict what they will be in the future.

My advice would be to figure out what you would be okay with taking out if they hit their caps (10.5%/9.5%), and then not borrow any more than that. Any lower rates would then just be a bonus.

Winter is Coming
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby Winter is Coming » Fri Feb 07, 2014 1:03 pm

Makes sense thanks.

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bearsfan23
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby bearsfan23 » Fri Feb 07, 2014 10:21 pm

Current rates for this year - to July 1, 2014 are 5.4% for Stafford and 6.4% for Grad Plus. Agree with the previous post that they're pretty much guaranteed to go up unless the economy crashes.

We'llSeeWhatHappens
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby We'llSeeWhatHappens » Mon Feb 10, 2014 10:34 pm

There are some people who think that rates are going to go up. I currently work in the wealth management department of a major bank and every piece of internal analysis I read in regards to rates and the 10-year T-Bill indicates that most think rates will be flat and trading within a range of 2.5% - 3.25% for the foreseeable furture. As the economy gets better the thought is rates will go up and there is some truth to that, but if the economy even coughs the wrong way they will up their current bond buying program further which puts downward pressure on bond yields. Also another interesting caveat is that as the economy has shown signs of life money has flowed back into our bond markets (mainly because of safety) from emerging markets which has put downward pressure on yields again. As long as the Fed keeps printing, money will continue to be cheap for us prospective law students.

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cotiger
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby cotiger » Mon Feb 10, 2014 11:54 pm

We'llSeeWhatHappens wrote:There are some people who think that rates are going to go up. I currently work in the wealth management department of a major bank and every piece of internal analysis I read in regards to rates and the 10-year T-Bill indicates that most think rates will be flat and trading within a range of 2.5% - 3.25% for the foreseeable furture. As the economy gets better the thought is rates will go up and there is some truth to that, but if the economy even coughs the wrong way they will up their current bond buying program further which puts downward pressure on bond yields. Also another interesting caveat is that as the economy has shown signs of life money has flowed back into our bond markets (mainly because of safety) from emerging markets which has put downward pressure on yields again. As long as the Fed keeps printing, money will continue to be cheap for us prospective law students.


Key phrase there. Regardless, the "foreseeable future" is only about 6 months max IMO. Sure, this July may be in that range (7.1%-7.9% GradPLUS/6.1%-6.9% Stafford), but no one can reasonably make predictions about what it'll look like 17 or 29 months in the future.
Last edited by cotiger on Tue Feb 11, 2014 12:30 am, edited 1 time in total.

badaboom61
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby badaboom61 » Tue Feb 11, 2014 12:26 am

We'llSeeWhatHappens wrote:money will continue to be cheap for us prospective law students.


LOL at 6.4% interest + 4% origination fee being cheap money.

I get that it's a lot lower than it could be, and beats the 7.9% they used to offer, but that doesn't mean these loans aren't still a rip off.

tpfennin
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Re: Predicting Interest Rates for Loans for 2014-2017

Postby tpfennin » Tue Feb 11, 2014 12:32 am

Hedge again!! lol #DTYS




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