Graduate PLUS loans?

[skinglist]

Lurker, occasional credit forum poster.

 

I'm completing my first year of grad school at NYU. Not cheap. I've maxed out my Stafford Loans for this year and need to pay for summer classes. I'm exploring options other than using a 0% BT because I don't want to risk rate jacking. I've been determined to avoid traditional private loans because of the horror stories I've heard, and in the search for options I came across PLUS loans. No outbound links, I know, but google turns up a fair few results.

 

It seems that the interest rate is better (~7-8% depending on lender) vs. significantly higher for private loans?

My credit is good (730+ FICO on the various reports) so that's not a concern for me at the minute.

 

Am I missing something? I only need to cover this summer since fall and spring 07-08 will be back under Stafford Loans.

 

Thanks!

[ignoranceIsn'tBliss]

Lurker, occasional credit forum poster.

 

I'm completing my first year of grad school at NYU. Not cheap. I've maxed out my Stafford Loans for this year and need to pay for summer classes. I'm exploring options other than using a 0% BT because I don't want to risk rate jacking. I've been determined to avoid traditional private loans because of the horror stories I've heard, and in the search for options I came across PLUS loans. No outbound links, I know, but google turns up a fair few results.

 

It seems that the interest rate is better (~7-8% depending on lender) vs. significantly higher for private loans?

My credit is good (730+ FICO on the various reports) so that's not a concern for me at the minute.

 

Am I missing something? I only need to cover this summer since fall and spring 07-08 will be back under Stafford Loans.

 

Thanks!

 

Grad Plus is very similar to normal Plus loans. The exception is that these loans are issued in the student's name, (normal is in parents), and it's for grad studies. (not undergrad.)

 

IIRC, FFELP plus loans are fixed are at 8.5%, and direct plus is 7.9%. The max you can borrow is COA - other aid.

[skinglist]

Grad Plus is very similar to normal Plus loans. The exception is that these loans are issued in the student's name, (normal is in parents), and it's for grad studies. (not undergrad.)

 

IIRC, FFELP plus loans are fixed are at 8.5%, and direct plus is 7.9%. The max you can borrow is COA - other aid.

 

Thanks! And it seems like they can be consolidated with Stafford unlike private loans?

[ignoranceIsn'tBliss]

 

Grad Plus is very similar to normal Plus loans. The exception is that these loans are issued in the student's name, (normal is in parents), and it's for grad studies. (not undergrad.)

 

IIRC, FFELP plus loans are fixed are at 8.5%, and direct plus is 7.9%. The max you can borrow is COA - other aid.

 

Thanks! And it seems like they can be consolidated with Stafford unlike private loans?

 

Cynic would have better info than I would on this subject. When I did fed con for 2 months, you could only consolidate federally backed loans (such as PLUS and staffords) if the loans were issued in your social security number. So by that, yes I expect you could consolidate grad plus and staffords loans together. But a parent can't consolidate their child's stafford loans with their PLUS loans.

 

check with a fed consolidation program for more updated info on that subject.

[Cynic]

Ignorance is absolutely correct. You can consolidate your federal grad plus loans with other federal loans.

 

Two things about Grad Plus loans:

 

1) They go into repayment right after they are fully disbursed. You can get an in-school deferment on a Grad Plus loan, but you may need to request it, unlike the automatic deferment that usually comes with Stafford loans. No interest subsidy.

2) They don't have a 6 month grace period.

 

IMO they're a lot better then most private loans.

Edited April 19, 2007 by Cynic

[skinglist]

Never saw these last two responses until I searched out my post on PLUS loans for another poster.

 

Thanks, Cynic and Ignorance.

 

I was granted an automatic in school deferrment, which is nice. Of course interest still acrues but it's easier to pay that than to pay ful payments while in school. What I liked was that Citibank also automatically offered a 1.25% rate reduction so they're 7.25, not much more than my staffords.

 

I knew about the lack of grace period, but that's OK. I plan to do a consolidation next spring (I should graduate May 08) to go into effect following graduation to save some sanity of multi payments and ideally to get the graduate staffords away from HSBC. As a lender they're fine but I hate the lack of web access.