Help me understand structuring student loan repayment

[Anonymous]

For a student who will be taking out student loans as a component of funding their education at the maximum federal level, but avoiding private loans, it appears that they can estimate having access to $27,000. (5,500 freshman, 6,500 sophomore, 7,500 for junior and senior years)

What is the longest term you can expect to repay them over if you have only $27,000 in loans? Trying to minimize monthly payment; for purposes of this analysis ok with higher interest rate, but interested in quantifying what that would be. Is the interest rate for federal (non-subsidized) loans the same whether its a 10 or 20 year payback?

[Anonymous]

Anonymous wrote:For a student who will be taking out student loans as a component of funding their education at the maximum federal level, but avoiding private loans, it appears that they can estimate having access to $27,000. (5,500 freshman, 6,500 sophomore, 7,500 for junior and senior years)

What is the longest term you can expect to repay them over if you have only $27,000 in loans? Trying to minimize monthly payment; for purposes of this analysis ok with higher interest rate, but interested in quantifying what that would be. Is the interest rate for federal (non-subsidized) loans the same whether its a 10 or 20 year payback?

They will owe more than $27k when they graduate as interest accrues.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For a student who will be taking out student loans as a component of funding their education at the maximum federal level, but avoiding private loans, it appears that they can estimate having access to $27,000. (5,500 freshman, 6,500 sophomore, 7,500 for junior and senior years)

What is the longest term you can expect to repay them over if you have only $27,000 in loans? Trying to minimize monthly payment; for purposes of this analysis ok with higher interest rate, but interested in quantifying what that would be. Is the interest rate for federal (non-subsidized) loans the same whether its a 10 or 20 year payback?

They will owe more than $27k when they graduate as interest accrues.

Thanks- yes I understand that.

[Anonymous]

Speaking from experience here.....
The interest rate is usually specified at the time you take the loan. For us, we had 4 years of loans. For two years the interest rate was lower than the other two. Our loan provider gave an interest rate discount with 24 months of “on time” payments. So, after 2 years of paying, the rates came down.
Does the company that you have the loan with have a loan calculator to estimate monthly payments?

[Anonymous]

https://studentloans.gov/myDirectLoan/index.action

[Anonymous]

The interest rate of all the loans will be fixed no matter the loan term, but the rate varies every year. It is indexed to the 10-year T Bill plus a margin. It's 4.66% for the 2014-2015 school year, and projected to increase slightly every year, capped at 8.25%. I wouldn't be surprised if it was at around 6 or 7% by the time your student takes his last loans.

[Anonymous]

I hate all of my federal loans and much prefer the private ones I took out. They have lower interest rates and much more favorable terms.

[Anonymous]

Anonymous wrote:I hate all of my federal loans and much prefer the private ones I took out. They have lower interest rates and much more favorable terms.

Please explain. I'm just starting to look at loans for my HS senior daughter and have heard subsidized federal loans are the best choice.

[Anonymous]

A private college tuition cost is about $50000 tuition +25000 other expenses, that is a total of $75000. I am planning for my kids college. $75000 per child per year for me is a lot of money. I didn't go to undergraduate school here in the USA, so I am a bit confused. In the DC metro area, are there lots of families who can afford this tuition? Do private colleges students usually work part-time at least to pay for their living expenses? I know the federal loan would not cover this much, then are kids able to borrow $50000 a year somewhere or parents need to cosign assuming that parents could afford the loan? Would colleges offer reduced tuition for families who cannot afford to pay that tuition? Is it common that extraordinary kids won't go to top colleges due to high tuition? Or there is almost no chance for ordinary families even to be accepted by Ivy? Thank you for sharing your insights and knowledge!

[Anonymous]

Anonymous wrote:A private college tuition cost is about $50000 tuition +25000 other expenses, that is a total of $75000. I am planning for my kids college. $75000 per child per year for me is a lot of money. I didn't go to undergraduate school here in the USA, so I am a bit confused. In the DC metro area, are there lots of families who can afford this tuition? Do private colleges students usually work part-time at least to pay for their living expenses? I know the federal loan would not cover this much, then are kids able to borrow $50000 a year somewhere or parents need to cosign assuming that parents could afford the loan? Would colleges offer reduced tuition for families who cannot afford to pay that tuition? Is it common that extraordinary kids won't go to top colleges due to high tuition? Or there is almost no chance for ordinary families even to be accepted by Ivy? Thank you for sharing your insights and knowledge!

Expected family contribution, demonstrated need, merit aid and related topics are discussed ad nauseum in this and other forums. Do some basic research and come back with more specific questions.

[Anonymous]

If you enter an income driven repayment plan, it might be decades.

[Anonymous]

I graduated in 2004 and I’m still paying off the $20K in federal loans that I accumulated during undergrad. I couldn’t tell you which repayment plan my 21 year old self chose, but at 2.6% interest, I make the minimum payment each month of about $110. Remaining Balance is about $5K.

In 2005 I was pulling in a cool $35K per year. Now it’s about $135K. I could pay off the $5K balance today, but the interest rate is so low I’d rather invest it.