Sunday, June 8, 2008

Time for Financial Aid Decisions

I finally received information from Penn on how to apply for loans. The Stafford loan application is extremely easy. Just pick a lender and send the info to Penn and they take care of the application. According to many news sources, there are a lot of lenders dropping out of the student loan business. But Penn still had more than enough options, with what I thought were decent opportunities to lower costs through interest rate reductions and other benefits as rewards for signing up for auto-pay, paying on time, etc. One lender definitely came out on top in terms of the benefits, so that's what I went with.

I am lucky to A) have some money put away and B) a spouse that will be working full time while I'm in school. Therefore, I have some decisions to make about how much money I really need to borrow and at from what sources. The Stafford loan is a no-brainer, but I am not sure if I will take a Grad PLUS loan or an alternative loan. Grad PLUS has a rate of 8.5%, which right now is really high. Alternative loans have lower rates (assuming you qualify), but they are variable. You can find many predictions for what rates are going to do in the future, but who the heck really knows. Another option we're considering is a home equity loan or line of credit. We've got a little bit of equity in our home and the rates might be pretty good, especially if we can get fixed rates. We'd have to make payments during school though, which is a consideration.

Sooo, Hubby and I have a lot of work ahead of us to figure out our budget, how much money we really need to borrow, and what type of loan. Lots of fun on a hot day.

Hope all readers on the East Coast are finding ways to keep cool!

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