Taking out Stafford vs. Sallie Mae loan

[tju411]

I see that a lot of people here are talking about already being in debt, whereas I am talking about taking some on, so if this is the wrong board, could you point me elsewhere?

 

I have one more year of school left to earn my master's degree in computer science (i.e. one of the few fields where I'll have no problem getting a job), so I'm comfortable with taking out loans to pay for this final year.

 

I see that Sallie Mae has rates as low as 2.87% APR (based off of LIBOR) with no fees, and federal unsubsidized Stafford loans are always 6.8% APR with a 1% disbursement fee. I've always heard that it's better to take public student loans before private, but assuming I qualify for an interest rate below 6.8% with Sallie Mae, does it make any sense to pass that up in favor of the Stafford loan?

 

References: http://www.salliemae.com/get_student_loan/...est_rates_fees/ http://studentaid.ed.gov/PORTALSWebApp/stu...tudentloans.jsp

 

Thanks for any guidance!

[LynnInMN]

The lowest interest rates are for only the best credit only.

 

If you are eligible, take the federal loans.

Reasons....deferments, foreberances, income contingent repayment upon consolidation, hardship plans, loan cancellation and forgivesness.

 

Private loans offer little to none of these.

[tju411]

Thanks Lynn. I intend to pay this off within about a year of graduating, so these shouldn't matter. However, I think that the extra safety is worth it, as plans can fall through.

[xelda]

I agree that you should go with the Stafford Loans. If you can qualify for subsidized loans, they will not accrue interest while you're in school.