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Need some financial aid guidance -- did I delay too long?


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Hey all -- I'm beginning PA school in about 5-6 weeks and must admit that unfortunately I delayed any sort of action on my school financials until about 2-3 weeks ago. At that time (about mid-June), I filled out the FAFSA and it was processed in 2-3 days. Since then, I haven't been sure what to do. I want to use the grad plus loans to cover any remaining cost not paid for by the stafford loans. By the way, this is also my very first time taking out student loans, as I was fortunate enough to have parents pay for my relatively cheap in-state undergrad tuition (commuted too, haha). So yeah, that's the situation...here are my questions:

 

1. Do I have to wait for the school to first determine my final loan eligibility (from the fafsa info) or do I contact them and let them know what I hope to do (stafford + grad plus)?

 

2. Am I too late to receive federal stafford and federal grad plus loans in time for the beginning of school? I have to find an apartment very soon and was wondering if I will probably have to pay out of pocket for the first month until the loans are processed/disbursed.

 

3. If I am too late to receive federal loans, I guess I'll have to go private. Are there any people here who financed their entire education via private loans like Sallie Mae, or through another bank (citi, chase, etc)? I have good credit and have no problem paying bills on time, but I hear private lenders are not a good option.

 

I am really in the dark here. I've been reading several resources on financial aid, but only have a partial picture of how the entire process works since this is the very first time I've needed the loans. Thanks in advance for the information.

1. Your school will automatically gets your FAFSA info and will process it and determine how much you're eligible for based on your 2010 income. There is a separate application for Grad Plus. Once your school processes your FAFSA, they'll send you info on filing for Grad Plus. You will automatically get $20,500 per year in Stafford and you call put on your Grad PLUS application the rest of the amount you want to request.

 

2. You are not late for the Stafford and Grad Plus loans, however, your disbursements may delay depending on how fast your school processes FAFSA, so you may have to pay out of pocket for the first month or so of rent and other living expenses until the disbursements arrive.

 

3. No need to do this. However, a word of advice. Grad Plus loans are federal loans but they're also private so their interest rate is really high 7.5% or 8%. If you have very good credit, you might want to consider borrowing from private loans with lower interest rate. You should check with your bank or major banks e.g. wellsfargo, bank of america, etc... to see if they have good interest rate offers with good credit. Bottom line is shop around for the best interest rate before you settle for the outrageous Grad Plus rate.

Thank you very much for the information, very helpful. Glad to know I'm not too late. I'll admit, I did cringe at the ~8% interest rate of the grad plus loans as well. I'm hesitant to go private if I can avoid it, however. I like the idea of being able to consolidate loans into a single payment post-graduation. I guess I will shop around, however, since it's just the smart thing to do. Thanks again...there's so much to get done in the next few weeks.

1. Do I have to wait for the school to first determine my final loan eligibility (from the fafsa info) or do I contact them and let them know what I hope to do (stafford + grad plus)? It depends on the school you should have a financial aid counselor to help you (the steps should also be outlined on the fin aid website for your school as well) my school had a GradPlus request form that we had to fill out and fax to them and THEY applied for the loan for us. So not every school has you apply for the loan on your own which is why you need to check with them and see how they want you to do it.

 

2. Am I too late to receive federal stafford and federal grad plus loans in time for the beginning of school? I have to find an apartment very soon and was wondering if I will probably have to pay out of pocket for the first month until the loans are processed/disbursed. Even if you whould have applied months ago you still would have had to pay out of pocket the first month at least. Fin aid is not disbursed until you have been in classes for at least a week (after add drop period) they need time to finalize any charges (bookstore, tuition, feees etc) before they finalize your account and send you whats left. In your case you may get yours later than everyone else who was more proactive so I would prepare to take care of at least two months worth of stuff....just incase. Take mys chool, our first disbursement is Aug 18th, late people may not see their stuff till the end of the month when bills are due again.

 

3. If I am too late to receive federal loans, I guess I'll have to go private. Are there any people here who financed their entire education via private loans like Sallie Mae, or through another bank (citi, chase, etc)? I have good credit and have no problem paying bills on time, but I hear private lenders are not a good option. Even with good credit I have heard it is incredibly hard to get a private loan. Most private loans (designated as education loans) will still need to be certified by your school...the banks want to make sure that youre not borrowing more than the cost of attendance...there are personal loans and lines of credit that you can get that do not have to be ceritified. GradPlus is not a private loan it is a federal loan and those are two different things, interes for Stafford is 6.8% and GradPlus is 7.9. The difference between school loans and personal loans is something you may want to check out before jumping into either one. The biggest thing for me is that if you even think that you may go through the NHSC or military for loan repayment they WILL NOT pay back any personal loans....the NHSC will go as far as to not payback anything even consolidated with a personal loan so definitely keep that in mind.

NHSC will pay for all loans that were used to pay for PA school PLUS prerequsities during undergraduate regardless of federal or private loans. With consolidation loans, they will only pay the portion that was used to pay for PA school and prerequsities. They don't pay, however, for personal loans e.g. to a relative or something like that. Once you're approved for the loan repayment, NHSC will mail you a check for $60K for the first two years and you must send the check to pay toward your loans. You will need to send them prove that the $60K was used to pay for the loans and not anything else, otherwise, there would be fines.

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