myrichuncle.com

[Erapitt]

I just hate the 3% origination fee on Grad PLUS loans.  I'm going private, LIBOR+2.55% w/no origination fee and a 9-month grace period (which I think I'm really going to appreciate if I end up in a clerkship).  This can also be knocked down 1% if you do auto-debit and make enough on-time payments.  But it is a risk if interest rates continue to shoot up; I'm betting they'll level off before too long.

They def. aren't going to be leveling off.  They just were at all time lows, now it will raise up for sometime.  The economy is getting better and as interest rates increase, so will mortgage and loan rates.

That's your prediction, and I understand you're going to make your decisions based on the assumption that rates will rise.  However, since you're not on the federal reserve board, I don't think you can say that they "def" are going to do one thing or another.  Beranke hinted in a speech a week or two ago that he's considering stopping the rate hikes; that very day the Dow went up 200 points.

Have you ever taken a simple economics course buddy?  Its not like I am pulling my thoughts out of thin air.

Eh, screw it, I'm not going to argue with you.  Have fun paying back $100K of loans at 8-10% for the rest of your life.  Sorry I tried to offer some feedback regarding the decision to pursue loans that have Variable Rates.

[whoisjohngalt]

I just hate the 3% origination fee on Grad PLUS loans.  I'm going private, LIBOR+2.55% w/no origination fee and a 9-month grace period (which I think I'm really going to appreciate if I end up in a clerkship).  This can also be knocked down 1% if you do auto-debit and make enough on-time payments.  But it is a risk if interest rates continue to shoot up; I'm betting they'll level off before too long.

Most of that is true, except many companies (such as the non-profit Northstar (T.H.E.)) will knock off the origination fee at disbursement.  Also, T.H.E's GradPLUS offers discounts that you continue to have as long as you are in good standing.  Most private loans take away all discounts as soon as you miss ONE payment - and they don't let you ever get it back. 

I'm in a weird position because I'm pretty sure I have to go through my school for GradPLUS loans (direct lender).  Though my financial aid advisor said that GradPLUS might not be the way to go for me... more on that when I get more info.

[Alamo]

I just hate the 3% origination fee on Grad PLUS loans.  I'm going private, LIBOR+2.55% w/no origination fee and a 9-month grace period (which I think I'm really going to appreciate if I end up in a clerkship).  This can also be knocked down 1% if you do auto-debit and make enough on-time payments.  But it is a risk if interest rates continue to shoot up; I'm betting they'll level off before too long.

They def. aren't going to be leveling off.  They just were at all time lows, now it will raise up for sometime.  The economy is getting better and as interest rates increase, so will mortgage and loan rates.

That's your prediction, and I understand you're going to make your decisions based on the assumption that rates will rise.  However, since you're not on the federal reserve board, I don't think you can say that they "def" are going to do one thing or another.  Beranke hinted in a speech a week or two ago that he's considering stopping the rate hikes; that very day the Dow went up 200 points.

Have you ever taken a simple economics course buddy?  Its not like I am pulling my thoughts out of thin air.

Eh, screw it, I'm not going to argue with you.  Have fun paying back $100K of loans at 8-10% for the rest of your life.  Sorry I tried to offer some feedback regarding the decision to pursue loans that have Variable Rates.

Yes, I took both macro and micro econ courses my last year of UG, although that was 6 years ago now.  I understand your opinion, and that there are reasons for doing what you're doing, but don't act like you know exactly what's going to happen - nobody does.  You're making a prediction about the future - all economic predictions are inherently fallible.

If you look at the graph I posted earlier, interest rates right now are around the average of what they've been over the past 15 years or so.  If you want to make a more elaborate case for your reasoning, I'd certainly be interested to hear it, but just realize that you're only making a case, not elucidating some sort of immutable gospel truth.

[cesco]

I appreciate the good arguements - very helpful info.

Also, thanks 'whoisjohngalt' for the info on the origination fee - Ill have to keep my eye out for that discount option.  I have a group of lenders to compare, just havent done it yet. 

I personally still think I am going to stick w/the fixed rate.  It is mostly for my piece of mind.  I had a 2nd mortgage on my 1st house and it was variable rate.  I HATED the fact that every month the payment slowly inched up.  That was my "lesson learned" on variable rates.