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One thing I am unclear about regarding Gradplus: it asks you if you want to take out the full allowed amount or a specific amount...

Is there any later flexibility down the road if you decide you need more or less? I worry:

A) if I take out the full allowed amount and end up not needing all of it, can I still return the unused amount or will I have to keep it (with the interest of course.)

B) if I take out a specific amount under the allowed amount and end up needing a bit more at the end of the year, can I apply for the difference (up to the allowed amount)?

rocketman wrote:One thing I am unclear about regarding Gradplus: it asks you if you want to take out the full allowed amount or a specific amount...

Is there any later flexibility down the road if you decide you need more or less? I worry:

A) if I take out the full allowed amount and end up not needing all of it, can I still return the unused amount or will I have to keep it (with the interest of course.)

B) if I take out a specific amount under the allowed amount and end up needing a bit more at the end of the year, can I apply for the difference (up to the allowed amount)?

Bump, I'm taking out ~30-40k in gradplus next year, I'd like to know peoples experience with them in a more general sense.
Specific question: Has anyone tried getting Income based assistance from the Fed with respect to gradplus?

+1 for curiousity about this issue, but I have what I think should be the answer.

There's no pre-payment penalty with federal loans, and I believe you can pay off the interest as you go. So in my opinion the oft-repeated slogan "borrow ONLY what you know you'll need" is overstated when it comes to responsible people borrowing with federal loans. For example: I plan on borrowing the maximum Grad Plus loans that I'm allowed, and to spend that money conservatively. If at the end of the year I have money left over, I'll just pay that money right back to the Feds. I would rather have more money than I need at the end of the year than have less than what I need.

Importantly, if you're someone who can't help spending every cent in your accounts, then this strategy is less prudent.

I think the answer to the original post is essentially YES to both A) (can you return unused amount- see caveat below though) and B) (can you change how much of the total amount you request). As far as I know there is no early repayment penalty, and I think that means you can pay back whatever amount you don't need at any time. However, it would technically be in the form of 'repaying' the loan rather than 'returning the unused amount' I think (meaning that before you actually pay the unused money back interest would accrue since grad plus is not subsidized). I believe that the proportion of your award eligibility for a given loan can be adjusted semester by semester as that is how the loans are disbursed. You probably should verify all this info further (with studentloans.gov), but I believe it is TCR.

aPosseAdEsse wrote:+1 for curiousity about this issue, but I have what I think should be the answer.

There's no pre-payment penalty with federal loans, and I believe you can pay off the interest as you go. So in my opinion the oft-repeated slogan "borrow ONLY what you know you'll need" is overstated when it comes to responsible people borrowing with federal loans. For example: I plan on borrowing the maximum Grad Plus loans that I'm allowed, and to spend that money conservatively. If at the end of the year I have money left over, I'll just pay that money right back to the Feds. I would rather have more money than I need at the end of the year than have less than what I need.

Importantly, if you're someone who can't help spending every cent in your accounts, then this strategy is less prudent.

Except you pay an origination fee on the money you take out.

blowhard wrote:

aPosseAdEsse wrote:+1 for curiousity about this issue, but I have what I think should be the answer.

There's no pre-payment penalty with federal loans, and I believe you can pay off the interest as you go. [...]
Importantly, if you're someone who can't help spending every cent in your accounts, then this strategy is less prudent.

Except you pay an origination fee on the money you take out.

It's not too bad though. Just 3% right?

I'll borrowing nearly $12k in Grad Plus this year. That's a $360 origination fee.

I'm pretty confident that paying 360 bucks to make sure I have enough money to live this year is worth it.

aPosseAdEsse wrote:+1 for curiousity about this issue, but I have what I think should be the answer.

There's no pre-payment penalty with federal loans, and I believe you can pay off the interest as you go. So in my opinion the oft-repeated slogan "borrow ONLY what you know you'll need" is overstated when it comes to responsible people borrowing with federal loans. For example: I plan on borrowing the maximum Grad Plus loans that I'm allowed, and to spend that money conservatively. If at the end of the year I have money left over, I'll just pay that money right back to the Feds. I would rather have more money than I need at the end of the year than have less than what I need.

Importantly, if you're someone who can't help spending every cent in your accounts, then this strategy is less prudent.

You'd probably be better off just taking out less the next year, with the high origination fees.

Desert Fox wrote: You'd probably be better off just taking out less the next year, with the high origination fees.

Good point.

As a follow-up to this thread - for the unsubsidized stafford loans (aka the type that accrues interest even during the school period), the lengthy info sheet we had to read before signing electronically stated that the interest gets capitalized.

Is there a way by which we can arrange to make the interest payments each month as it accrues so as not to have the interest amounts capitalized, or are we stuck until we find a job after graduation to start making loan payments?

(Granted it doesn't make that much sense to be using loan money (or other sources of funding perhaps) to attempt to pay off the loan (even just the interest amounts) ...)


Thanks!

pekkle wrote:As a follow-up to this thread - for the unsubsidized stafford loans (aka the type that accrues interest even during the school period), the lengthy info sheet we had to read before signing electronically stated that the interest gets capitalized.

Is there a way by which we can arrange to make the interest payments each month as it accrues so as not to have the interest amounts capitalized, or are we stuck until we find a job after graduation to start making loan payments?

(Granted it doesn't make that much sense to be using loan money (or other sources of funding perhaps) to attempt to pay off the loan (even just the interest amounts) ...)


Thanks!

You can always repay your loan (no early payment penalty), but as stated above most loans have origination fees - a charge calculated based on the percentage of the loan amount. Take away message - borrow only as much as you need.

aPosseAdEsse wrote:

blowhard wrote:

aPosseAdEsse wrote:+1 for curiousity about this issue, but I have what I think should be the answer.

There's no pre-payment penalty with federal loans, and I believe you can pay off the interest as you go. [...]
Importantly, if you're someone who can't help spending every cent in your accounts, then this strategy is less prudent.

Except you pay an origination fee on the money you take out.

It's not too bad though. Just 3% right?

I'll borrowing nearly $12k in Grad Plus this year. That's a $360 origination fee.

I'm pretty confident that paying 360 bucks to make sure I have enough money to live this year is worth it.

You'll be paying like $1k interest.

.