Confused about loans

[ertanner]

I am anticipating I will need to cover $10,000 of tuition, plus all living expenses for two years. What type of loans would be best? I am a little lost.

[rising_star]

Federal subsidized loans are the best. Perkins is better than Stafford (lower interest rate). Subsidized means the government pays the interest while you are at least a part-time student and for several months after graduation (9 months after for Perkins, 6 months after for Stafford). I haven't checked lately but a year ago the interest rates were 5.0% on Perkins loans and 6.8% on Stafford. So, from a repayment perspective, Perkins wins over Stafford. Apparently finding a lender can be tricky but my university just had a list with a bunch of options and students pick one off the list (which gave info on the fees and whatnot you have to pay for loan origination, which they really just take out of what they give you). If you haven't been working full-time in 08, you're probably eligible for at least the subsidized Stafford loans.

Next would be federal unsubsidized loans. The federal unsubsidized Stafford loans have the same interest rate as the other Stafford loans but the interest is not paid by the government. Instead, it's capitalized (whatever that means). Basically, it means that to stay on top of it, you need to be paying the interest portion while you're in school. I think there's the same six month grace period on repayment of principal after your studies cease.

The worst option, imo, is the private loan market. You'll have to shop around for the best interest rate. Lenders can be sleazy, so keep that in mind.

If you're looking at $10K, you'll be eligible at least for some combo of Stafford loans. Take out the max in subsidized and then whatever else you need in unsubsidized.

[ertanner]

Thanks for explaining all of this.

I am concerned, however, about living expenses. I plan to work part time, and be in school full time, but it will not be enough to cover living expenses for two years. Can my loans cover this??

[sweatingbullets]

I am concerned, however, about living expenses. I plan to work part time, and be in school full time, but it will not be enough to cover living expenses for two years. Can my loans cover this??

I am also worried about this. My MA program is abroad so working is almost impossible. (The visa restricts work to 20 hours/wk, and the university recommends no more than 8hrs/wk, and jobs are hard to come by)

The Grad PLUS Loans state that the amount borrowed cannot exceed the "cost of attendance" at NYU. Subsidized and Unsubsidized Stafford loans have a combined limit of $20,500. Tuition alone is ~$32,000! (I am still waiting to hear about scholarships, but I think it is better to not get my hopes up).

So if I take $32,000 in loans to cover tuition, how am I going to pay my rent while I am abroad?

[pizzatime]

As far as I know cost of attendence is the whole package, including rent, books, transportation, etc; therefore you should be able to borrow grad PLUS loans covering that whole amount.

[jduds]

Pizzatime is right. Cost of attendance include all expenses, tuition, room, board, insurance, etc.

The school should have an estimated student budget, I would use that as your guide for what you cost of attendance should be.

Good luck.