Understanding my Loan Offer Forum

[whereskyle]

It looks like I can cover my COA with Federal Direct Unsubsidized Stafford Loans. Is this the best kind of loan that I can hope for? Interest is at 5.41% and is directly from the government (if I understand correctly.) Anything significant about this type of loan as opposed to others?

[bananatopia]

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[whereskyle]

The interest rate for Graduate Stafford loans is set in July preceding each school year with a rate equal to the 10 year US treasury note + 3.6%. 10 year treasury notes were especially low last year (1.8%). They're already at 2.7% and projections for July of this year are around 3.3%, which would give a 6.9% interest rate on your 1L loans. 3.3% is also very low historically, so ten year notes are projected to continue an upward trend over the next several years. I'm using 3.8% and 4.0%, but this is necessarily guesswork. That would make your 2L and 3L loans 7.4% and 7.6% respectively. Outside of loans from family members, these are still the best loans available.

Thank you very much for the analysis.

[zephyr12]

The interest rate for Graduate Stafford loans is set in July preceding each school year with a rate equal to the 10 year US treasury note + 3.6%. 10 year treasury notes were especially low last year (1.8%). They're already at 2.7% and projections for July of this year are around 3.3%, which would give a 6.9% interest rate on your 1L loans. 3.3% is also very low historically, so ten year notes are projected to continue an upward trend over the next several years. I'm using 3.8% and 4.0%, but this is necessarily guesswork. That would make your 2L and 3L loans 7.4% and 7.6% respectively. Outside of loans from family members, these are still the best loans available.

This is exactly what I was looking for since I can use either Graduate Stafford OR the Graduate PLUS loans offer to cover the COA for me. Are Stafford loans the better deal?