Should I take a student loan?

Which student loan should I take?

• I am starting a graduate school program in August. I have an option between 2 loans from Discover. One is a private loan with a variable interest rate and no fees. The other is the Federal PLUS loan with a fixed interest rate and a 3% origination fee. Which loan should I do? Private loan: •Variable interest rate (Prime plus 2.75% - currently that is 6.00%) •0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account •Zero origination fees •Zero guarantor fees •Zero prepayment fees •Zero payments until 6 months after graduation or enrollment in school less than half-time •15 year repayment period •2% reduction of principal balance upon graduation Federal PLUS loan: •8.25% fixed interest rate •0.25% repayment interest rate credit when payments are set up for automatic debit from a bank account •3% origination fee •Zero guarantor fees •Zero prepayment fees •Payments typically begin within 60 days after final disbursement; you have the option to defer payments while your student is enrolled at least half-time •10 to 25 year repayment period

• Answer:

  Stay witht he Federal Plus loan because it is a fixed rate. While the Prime rate is pretty low right now there is no guarantee that it won't rise and be a lot higher when your student loan comes due for repayment. Use the money wisely.... you need a career that allows you to pay off that loan within 5 to 10 years. No use wasting thousands on student loans to get a job that only makes 40K a year. The United States has over 80 000 "missing" Engineers. There is a field with a guaranteed 100K plus income a year and you will get job offers from employers... no need to apply. (They have been known to pay off your student loans as a bonus...) But... it requires intelligence and MATH classes.