University of Michigan Class of 2010

[Broohaha]

Whats the verdict on the loan situation???


My calculations for $60,000 (20K per year) in loans based on 10 year repayment

Grad Plus
Fee- $1500 (500/year)

Interest Capitalization Year 1 1619
Interest Capitalization Year 2 3366
Interest Capitalization Year 3 5124

Total Amount at repayment- 71609
Monthly Payments for 10 years- 865
Total 103804


MILoan fixed
Fee- $2100 (700/year)

Interest Capitalization Year 1 1429
Interest Capitalization Year 2 2977
Interest Capitalization Year 3 4522

Total Amount at repayment- 71038
Monthly Payments for 10 years- 823
Total 98758 (a savings of 5046 over grad plus)

MI Variable (assumed constant 6.18)
Fee- $2100 (700/year)

Interest Capitalization Year 1 1279
Interest Capitalization Year 2 2637
Interest Capitalization Year 3 4000

Total Amount at repayment- 70016
Monthly Payments for 10 years- 783
Total 94039 (a savings of 9765 over direct)


Damn that took a long time to figure out- I couldnt find any loan calculators that accounted for capitalization. So it LOOKS, to me, that the MIloan creditworthy program is the way to go. Im not sure about fixed vs variable, any thoughts on interest rate trends?


Aight so tell me if if right or wrong here-- I don't see any benefit to choosing grad plus over the Fixed rate MI loan.

Bouzie, i've been doing many similar calculations myself lately. One important thing to keep in mind about the MILoan variable rate is that it likely will not be anywhere close to 6.18. Unfortunately it will probably be in the 6.7-6.8 range. This is because the rate is readjusted every June 1st and fixed to the yearly average of the LIBOR. It took me a while to figure this out this other day but its nice to be able to share the info I gathered with someone...

There are four LIBOR rates released each month. MILoan averages each rate individually over the course of one year and then averages these four rates to arrive at an aggregate average. This aggregate average is then increased by 1.5 to arrive at the rate.

I was able to find these rates online and messed around with them in Excel...



click here to open the image in a new window: http://img116.imageshack.us/img116/6779/miloanzo4.jpg

So, as you can see in the June 2006 row, the pink, yellow, light blue and sky blue columns are each averaged out on the right. These four averages are in turn averaged and result in 4.68 (red cell). 4.68 + 1.50 = 6.18; the rate this year.

Unfortunately for us, rates have been rising steadily over the past year. We are missing one month of data (May 2007), but as things stand now, the average of the four rates over the last ELEVEN months is 5.37. 5.37 + 1.50 = 6.87, just .03 lower than the fixed 6.9 rate being offered. Unfortunately thi sis unlikely to go down based on whatever May's LIBORs are because the LIBOR average has been increaseingly steadily literally every single month for the last two years!!

So yeah, just wanted to share that with you. The rate will still likely be in the 6.8-6.9 range. The thing we have to consider is whether we want to take the chance that the LIBOR will not be any HIGHER on June 1, 2008 and June 1, 2009. If rates keep going up, we'll be paying a 7.5ish type rate when we could have fixed in at 6.9.

MILoan is still great since 6.9 is much less than the 7.9 or 8.5 you have to deal with for grad PLUS. But its not nearly as great as it used to be, it seems.

On a side note, I mentiond this a few pages ago but I am really dissapointed that UM does not permit its students to take part in the MSF (michigan students first) program offered by the state of michigan. they refund ALL of your disbursement fees and give you a ZERO PERCENT rate after 36 on time payments. which is an INCREDIBLE deal which could save many a law student hundreds of thousands of dollars over the course of his career. of course, we are not able to partake since michigan siphons everything through Direct Loan.

[Broohaha]

I just completed all my promisary notes, submitted my application for a GradPLUS loan, and requested my increase in budget for health insurance and a laptop computer. It took about an hour total.

It should be more difficult to borrow that much money

computer = 2400 and insurance = 1k, right? do they require that you provide them with receipts/invoices and stuff?

[wilax3man]

I didnt go to ASW, so I'm wondering...what time do the bars in Ann Arbor close?

I think the answer is 2 am, legally.  Which is rather early, so I see a fair amount of postgaming in my future.

Yeah, it's 2am here in PA also...gotta do the late night party.

[divo72]

I didnt go to ASW, so I'm wondering...what time do the bars in Ann Arbor close?

I think the answer is 2 am, legally.  Which is rather early, so I see a fair amount of postgaming in my future.

Yeah, it's 2am here in PA also...gotta do the late night party.

or start earlier...

Gengis!! How's it going? Are you in bizarro world?

[Reach]

I just completed all my promisary notes, submitted my application for a GradPLUS loan, and requested my increase in budget for health insurance and a laptop computer. It took about an hour total.

It should be more difficult to borrow that much money

computer = 2400 and insurance = 1k, right? do they require that you provide them with receipts/invoices and stuff?

i gave them a price quote on a computer and used the 2006-07 price for the Pickering insurance (it may go up a bit)...  I don't know if they will need a completed application or not yet -- if so, it may need to wait until August (the health insurance increase).  FWIW, Pickering is more than $1k ... I think it's $2200.

Chickering...but yeah, I'd expect it to be $2400 or so if you plan to go through Chickering.  I did the promissory note stuff a few days ago but I haven't asked them for an increase due to health insurance or a computer. 

The computer situation pisses me off actually.  I found a Dell small business laptop with 2GB of RAM, a 256MB nvidia graphics card, and other features I want for ~$600 straight from Dell, but of course I had to ignore it since it's way more than 30 days prior to class.  That guideline is pretty ridiculous.

Oh...and Gengis?  Thanks for crushing my dreams about cheap furniture from graduates.  You are, of course, right that they're probably leaving now and not in August.  Great.

[Reach]

You say Chickering, I say Pickering...  OK, you're right.

There will always be good deals on computers.  The santa rosa stuff that came out in the last week should be moving the market enough to mean that if you buy a system in July, you'll be able to get something more powerful for a similar price.

For what it's worth, they told me they can't process my GradPLUS loan application until early July, so I was way early.

Seems like there's quite a few places to get cheap furniture year round in Ann Arbor, but I'd think demand  just might be > supply in August when everyone's moving in.

Chickering...Pickering...eith er way it's a pretty significant expense.  Hell, I'd call them Pickering if they'd give me a discount or something.

You're definitely right about the quad cores and other recent technologies that will push the price of computers down a bit...I guess I shouldn't complain too much since it's going to be covered by a loan either way.  I'm with you though.  I'd rather get my stuff squared away early.

[flyaway]

Gengis... I think your confusion is stemming from the fact that U of M's health insurance increase to the budget is not enough to cover the standard insurance (Chickering) that they recommend.

1.  What do you mean "the other" health insurance?

2.  I teach tomorrow (and all weekend); I'm off today, but getting ready for tomorrow.

3.  There's a book fair tomorrow and Sunday that they were setting up for today.  Looks like fun.

1. I guess I meant the more expensive than the standard Health insurance - is it that much better?

2. Ah ha. Good luck with that.

3. Really?!  Where?

[flyaway]

I think I may go with another plan.  My only concerns with the significantly less expensive plan I'm thinking about are 1. maternity (which I don't plan to use, at least not during 1L or 2L, but I'd hate to get accidentally pregnant)  2.  vision (need good vision coverage, because I have a history of eye problems) 3. don't see any mention of what is and isn't covered if you travel internationally.

Jolie mentioned that some students, especially those doing the internships abroad over the summer, are unhappy with Chickering's international coverage.  Can anyone give more info on that?

I need to figure out what I'm doing quickly, because I lose my health insurance at the end of the month, and I need to either get a short-term policy and then do Chickering in August, or I need to pick out a regular policy.

[divo72]

I arrive in one week, parents in tow!

What are you doing nights?

[Reach]

Gengis... I think your confusion is stemming from the fact that U of M's health insurance increase to the budget is not enough to cover the standard insurance (Chickering) that they recommend.

But they will increase your budget if you show any actual medical costs, including the increased cost of the Chickering plan or another plan.  I'm actually going to do a bit of comparison shopping, because the more I read about the Chickering plan, the less I like it.

I've also been thinking about getting down and dirty comparing alternative health plans.  If I do anything substantive, I'll post it here for public consumption.

If you're a good shopper, Gengis, I might have to whisk you away to Ikea for an afternoon since I'm anything but.