glikesw Posted June 12, 2012 Share Posted June 12, 2012 I have been reading some of the previous posts and I am finding almost no reason to choose government loans to help finance my education. New laws (Budget Control Act of 2011) will go into effect on all federal direct loans dispersed after July 1, 2012. Namely this means 1. Graduate students can no longer take out subsidized loans – meaning interest accrues on the loan while you are in school. 2. The upfront interest rebate on federal loans will be eliminated. This means an origination fee of 1% will be deducted from the amount you can receive for Direct Unsubsidized loans and a 4% origination fee (!!!!) from PLUS loans. That’s ridiculous! You will have to pay back money that you never received! There is no grace period with PLUS loans, you can request deferment, but interest is accruing during that time. Also, there is a lot of misinformation in some of these posts. The NHSC Loan Repayment program will indeed repay private loans as long as they are education loans. I know the government offers loan forgiveness, but that is after 10 years repayment (120 payments). I won’t need it then. Many private lenders offer competitive fixed rates and 0% origination fee with longer grace periods. I’m really trying to find the downside. Can anyone give substantive reasons to go with federal loans vs private???? Link to comment Share on other sites More sharing options...
glikesw Posted June 12, 2012 Author Share Posted June 12, 2012 I have been reading some of the previous posts and I am finding almost no reason to choose government loans to help finance my education. New laws (Budget Control Act of 2011) will go into effect on all federal direct loans dispersed after July 1, 2012. Namely this means 1. Graduate students can no longer take out subsidized loans – meaning interest accrues on the loan while you are in school. 2. The upfront interest rebate on federal loans will be eliminated. This means an origination fee of 1% will be deducted from the amount you can receive for Direct Unsubsidized loans and a 4% origination fee (!!!!) from PLUS loans. That’s ridiculous! You will have to pay back money that you never received! There is no grace period with PLUS loans, you can request deferment, but interest is accruing during that time. Also, there is a lot of misinformation in some of these posts. The NHSC Loan Repayment program will indeed repay private loans as long as they are education loans. I know the government offers loan forgiveness, but that is after 10 years repayment (120 payments). I won’t need it then. Many private lenders offer competitive fixed rates and 0% origination fee with longer grace periods. I’m really trying to find the downside. Can anyone give substantive reasons to go with federal loans vs private???? Link to comment Share on other sites More sharing options...
glikesw Posted June 12, 2012 Author Share Posted June 12, 2012 I have been reading some of the previous posts and I am finding almost no reason to choose government loans to help finance my education. New laws (Budget Control Act of 2011) will go into effect on all federal direct loans dispersed after July 1, 2012. Namely this means 1. Graduate students can no longer take out subsidized loans – meaning interest accrues on the loan while you are in school. 2. The upfront interest rebate on federal loans will be eliminated. This means an origination fee of 1% will be deducted from the amount you can receive for Direct Unsubsidized loans and a 4% origination fee (!!!!) from PLUS loans. That’s ridiculous! You will have to pay back money that you never received! There is no grace period with PLUS loans, you can request deferment, but interest is accruing during that time. Also, there is a lot of misinformation in some of these posts. The NHSC Loan Repayment program will indeed repay private loans as long as they are education loans. I know the government offers loan forgiveness, but that is after 10 years repayment (120 payments). I won’t need it then. Many private lenders offer competitive fixed rates and 0% origination fee with longer grace periods. I’m really trying to find the downside. Can anyone give substantive reasons to go with federal loans vs private???? Link to comment Share on other sites More sharing options...
flyingsquirrel Posted June 12, 2012 Share Posted June 12, 2012 hardship deferment, educational deferment, income-based repayment, etc Link to comment Share on other sites More sharing options...
flyingsquirrel Posted June 12, 2012 Share Posted June 12, 2012 hardship deferment, educational deferment, income-based repayment, etc Link to comment Share on other sites More sharing options...
flyingsquirrel Posted June 12, 2012 Share Posted June 12, 2012 hardship deferment, educational deferment, income-based repayment, etc Link to comment Share on other sites More sharing options...
ljmanders Posted June 14, 2012 Share Posted June 14, 2012 glikesw---You might want to call the NHSC contacts---I agree with the points you make regarding private vs. government, however, when I called the NHSC and spoke with one of the reps she made it very clear to me that the repayment of loans would be to "commercial lender institutions or a federal entity." I was looking at the Discover private lending source and I was told by the NHSC that they did not qualify. You might want to call and ask them about a specific private lender to make sure that they are eligible for NHSC repayment. Hope this helps. Link to comment Share on other sites More sharing options...
ljmanders Posted June 14, 2012 Share Posted June 14, 2012 glikesw---You might want to call the NHSC contacts---I agree with the points you make regarding private vs. government, however, when I called the NHSC and spoke with one of the reps she made it very clear to me that the repayment of loans would be to "commercial lender institutions or a federal entity." I was looking at the Discover private lending source and I was told by the NHSC that they did not qualify. You might want to call and ask them about a specific private lender to make sure that they are eligible for NHSC repayment. Hope this helps. Link to comment Share on other sites More sharing options...
ljmanders Posted June 14, 2012 Share Posted June 14, 2012 glikesw---You might want to call the NHSC contacts---I agree with the points you make regarding private vs. government, however, when I called the NHSC and spoke with one of the reps she made it very clear to me that the repayment of loans would be to "commercial lender institutions or a federal entity." I was looking at the Discover private lending source and I was told by the NHSC that they did not qualify. You might want to call and ask them about a specific private lender to make sure that they are eligible for NHSC repayment. Hope this helps. Link to comment Share on other sites More sharing options...
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