Federal or Private

[wvjules]

With the interest rate being 6.8% for both which one is the better option? Is it the origination fees and other associated fees that make the difference?

 

I currently owe about $2000 on a federal loan from way back when and that interest is only 2.3%. I plan on paying that one off while I'm back in school instead of consolidating it to a higher interest loan. Now that I'm going back to school in January I'm not sure how to finance my new education.

[Saria]

Always take the federal loan if you have a choice. Private loans should only be used as a last resort (if at all, IMHO).

[virtualtreasure]

Always take the federal loan if you have a choice. Private loans should only be used as a last resort (if at all, IMHO).

 

+1

[virtualtreasure]

6.8 sounds high for a fed loan they recently (July?) gave a decrease to many too.

[Saria]

6.8 sounds high for a fed loan they recently (July?) gave a decrease to many too.

 

That's only for subsidized undergrad loans. If the OP is talking about unsubsidized loans or loans for grad school, the 6.8% is current.

[wvjules]

http://www.salliemae.com/get_student_loan/...stafford_loans/

 

Interest rate

The interest rate on subsidized Stafford loans for undergraduate students that are first disbursed July 1, 2009–June 30, 2010 is 5.6%. For all subsidized Stafford loans for graduate and professional students, and for all unsubsidized Stafford loans for all students, the interest rate is fixed at 6.8%.

 

There is no reason I shouldn't be able to get a federal loan so I'll definately go in that direction. I just wasn't sure of the difference.

[tatersalad]

My personal opinion ...Federal. If I had it to do all over again, I would NEVER take out a private loan for school.