byeology Posted July 10, 2015 Share Posted July 10, 2015 Hey everyone, will be starting PA school at my instate program this fall and my parents have agreed to pay the entire tuition. However, that leaves me to take care of my own living expenses. I'm only looking to take out ~10k in loans to pay for rent/books/other expenses and supplement with the money I've saved prior to starting school. Was wondering what the best route would be to take out these loans, going the federal route through FAFSA or just taking out a private loan. Thanks! Link to comment Share on other sites More sharing options...
out_foxed Posted July 10, 2015 Share Posted July 10, 2015 Yikes! Consider your self very blessed. If your EFI is low enough FAFSA loans are the way to go, however depending on age or tax situations you might have to claim parents - The rules change often - which might leave you high and dry. I wouldn't worry about 20k or less in loans, even if they are private loans - but you gotta be very confident in your ability to pay those off in your first year. Right now fed (direct loans) are 4.2 / 5.8 / 6.4 sub/unsub/plus respectively. Private loans, man that's a hard guess, but they can be variable and shoot as high as 11%! But if you only have the loan for 3 years you'll be just fine. Consider too, direct loans and FAFSA is intended for helping the undeserved community, mostly, but also the middle class. So considering your own situation it is still anyone's best bet to work and save $$ right now, and do loans ONLY if you have to. So congrats~ my .02 Link to comment Share on other sites More sharing options...
FfIghter23 Posted July 11, 2015 Share Posted July 11, 2015 It really depends on your credit. Private loans: I got one with a variable rate in the 2.3 range and highest I saw it go was 3.45. I also had no debt and a credit score in top 10% of population. Link to comment Share on other sites More sharing options...
fakingpatience Posted July 11, 2015 Share Posted July 11, 2015 Out_foxed, the loans available for the PA grad programs through FAFSA aren't need based, and it's all unsubsidized. Everyone is offered the same loans based on tuition and costs forecast by the school. You might want to consider asking your parents to give you the $$ for living expenses and take out loans for the equivalent in tuition (so ask them to pay tuition -$10K); depending on your age, they might not be able to claim your tuition on their taxes (definitely double check on this part with a tax person, I am not positive not that). Also then you'll have the loans eligible for repayment if you can negotiate that into a contract after you graduate. Link to comment Share on other sites More sharing options...
GetMeOuttaThisMess Posted July 11, 2015 Share Posted July 11, 2015 Do parents own a home? If so, they could consider a HELOC for your living expenses, interest is tax-deductible (assuming they itemize), and in years past interest rates were quite competitive. I have an open one which I've never drawn on but have it there in case of emergency (<10% of my home value present day). Since I own my home outright I would really need to be hurting to touch it since it serves in essence as a second mortgage. As I recall in the terms I have ten years to draw on it up until the last day, and then ten years to payback. Link to comment Share on other sites More sharing options...
SoCalPA Posted July 11, 2015 Share Posted July 11, 2015 $10k is a very small barrier to PA school. You are doing the right thing by researching your options but rest assured you will find the $$. Congrats! ! Sent from my SM-G925P using Tapatalk Link to comment Share on other sites More sharing options...
SoCalPA Posted July 11, 2015 Share Posted July 11, 2015 Oh I agree FAFSA loans and consider a loan repayment. It might be best to actually take out the loans and have your parents as a backup in case you don't get a loan repayment program then they can make the lump sum payment on the loans. That way you might be able to go to school for almost free and your parents can keep their money. Of course you need to consider the interest implications. Maybe instead they'll put down on a condo for ya. ☆ Sent from my SM-G925P using Tapatalk Link to comment Share on other sites More sharing options...
byeology Posted July 12, 2015 Author Share Posted July 12, 2015 Hey guys thanks for all the replies! So, because the cost of my school is relatively low, my parents would rather pay it upfront rather than take out federal loans. I do have about ~20k saved up, but think it would just be easier for me to take out a private loan to help pay for rent/books/living expenses so I don't have to live off ramen for the next 2 years. If I were to take out ~10k, where would you all recommend me doing so? I really don't know much about loans because luckily I didn't have to take out any for undergrad. Thanks again!! Link to comment Share on other sites More sharing options...
out_foxed Posted July 24, 2015 Share Posted July 24, 2015 Out_foxed, the loans available for the PA grad programs through FAFSA aren't need based, and it's all unsubsidized. Everyone is offered the same loans based on tuition and costs forecast by the school. You might want to consider asking your parents to give you the $$ for living expenses and take out loans for the equivalent in tuition (so ask them to pay tuition -$10K); depending on your age, they might not be able to claim your tuition on their taxes (definitely double check on this part with a tax person, I am not positive not that). Also then you'll have the loans eligible for repayment if you can negotiate that into a contract after you graduate. F-Pat: Thanks for the advice; the program I'm applying for is actually undergrad (which undergrad P.A. programs will be gone by 2021), but yes the game changes for graduate school (which is good info for me too as I will be doing a masters program right after graduating). Considering Fflghter23's comment on stellar credit, sounds like it's possible to get a loan for less than the standard un-subbed loans. So the OP should look into both and see which one is the lowest rate and go with that. If you can find a subsidized loan of any type then I'd go with that and pay off the loan 1st after graduating. In other words get a quote for both options; taking education based loans and pocket parents for living expenses, or take private loans for living expenses and parents pay tuition. Ask the school if they have any affiliated banks and get a quote. Link to comment Share on other sites More sharing options...
Glorious_Ignoramus Posted July 27, 2015 Share Posted July 27, 2015 Stay away from private loans if you can - with federal you have the option of income based repayment plans and loan forgiveness in the future. This may seem unnecessary right now; or at least that's what I said when I started receiving GI Bill benefits. Got a full ride with housing stipend but life circumstances changed and I took out about 6x the loans I had initially anticipated. Link to comment Share on other sites More sharing options...
MT2PA Posted August 13, 2015 Share Posted August 13, 2015 Definitely go federal. With that low amount you should be able to stay in Stafford (vs PLUS). It will be easier to get forbearance if you need it for some reason or repayment from employers (if you work for the govt or qualify for loan forgiveness) than if you did a private loan. Link to comment Share on other sites More sharing options...
cjosephsmith Posted March 23, 2016 Share Posted March 23, 2016 Hey everyone, will be starting PA school at my instate program this fall and my parents have agreed to pay the entire tuition. However, that leaves me to take care of my own living expenses. I'm only looking to take out ~10k in loans to pay for rent/books/other expenses and supplement with the money I've saved prior to starting school. Was wondering what the best route would be to take out these loans, going the federal route through FAFSA or just taking out a private loan. Thanks! Lendingclub.com Sent from my LG-H901 using Tapatalk Link to comment Share on other sites More sharing options...
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