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.
Full Version: Federal or Private
Always take the federal loan if you have a choice. Private loans should only be used as a last resort (if at all, IMHO).
QUOTE (Saria @ Oct 14 2009, 12:16 PM) 
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
6.8 sounds high for a fed loan they recently (July?) gave a decrease to many too.
QUOTE (savetherobots @ Oct 14 2009, 12:27 PM)
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.
http://www.salliemae.com/get_student_loan/...stafford_loans/
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.
QUOTE
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%.
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.
My personal opinion ...Federal. If I had it to do all over again, I would NEVER take out a private loan for school.
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