To clarify what may seem to be conflicting reports of dropping interest rates on student loans in this thread, Stafford loans disbursed before
July 1 2006 have a variable rate that cannot exceed 8.25%. Stafford loans disbursed on or after this date are fixed at 6.8%.
Because of the plummeting interest rates, might private loan interest amounts actually be LESS during these strange economic times? What would be the pro or con of taking these loans on instead if the rates truly were lower? Just curious if anyone can provide insight with this topic.
Even in a situation where private loans had significant economic advantages to federal loans, it would be difficult to justify taking on more private debt than absolutely necessary. Private loans would not be eligible for the income based repayment or loan repayment assistance plans supported by the CCRA (College Cost Reduction Act).
If I knew for certain I would land a well paying job with a firm that would allow me to pay off my student loans in a reasonable amount of time, taking the lowest cost loan option would be an easy choice. However, my ability to land such a job is far from certain. What if I end up working in public interest? The savings represented by the LRAP would far outweigh the savings of any lower interest rate I could reasonably expect to find.