Law School Discussion

Stafford Loans

Stafford Loans
« on: May 03, 2006, 12:45:16 PM »
I was just looking into these and I'm a bit lost.

My school (GW) has suggested 4 lenders, one of which is the school itself, and the website link they provide doesn't work. The other, Sallie Maw (should this be Mae?) has no web link. So, I checked the websites for the other two lenders (Access Group & T.H.E. Loans through

The interest rates for Stafford Loans (not the PLUS loans, just the subsidized and unsubsidized Staffords) seem to differ greatly from last year to this year. Someone else said this is because Congress raised the interest rate for next year. Is this correct?

The interest rates also seem to be the same for each organization. Are Federal Stafford rates set by the gov't, and if so, then it really doesn't matter which lender I pick, b.c. all will offer the federally-mandated rate?

Anyone who knows, I'd appreciate your wisdom!

Re: Stafford Loans
« Reply #1 on: May 03, 2006, 01:00:29 PM »
Federal stafford rates are set by the government and they are raising this july 1st.  If you are familiar with one of the preferred lenders (i.e., if you've had loans with one of them in the past and had a good experience), choose that one.  Both Access and Sallie Mae are huge loan companies with good reputations (although Sallie Mae definitely likes to eat up the smaller loan servicers.)

Re: Stafford Loans
« Reply #2 on: May 03, 2006, 01:00:50 PM »
The lender you choose does not really matter.  The interest rate is set by the government and changes each July 1.  If you think you'll be interested in consolidating loans when you are done then it might matter who owns your loans.  Basically if you have loans with multiple lenders then any company can consolidate them for you... which means you can shop around.  If your federal loans are all through one company then right now the rules state that only the federal government can consolidate them. That doesn't make a huge difference to you but the federal government's consolidation plans tend to not have as many long-term payment plans so your monthly payments will not be lowered as much (because you're paying them off faster)... though the interest rates and fees are generally the best.  It's not a huge deal though, pick the lender that seems to have the best customer service is what I suggest.  My lender is really helpful on the phone, I like it.  I have Great Lakes though because I'm in school in the midwest.


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Re: Stafford Loans
« Reply #3 on: May 03, 2006, 03:30:52 PM »
Stafford interest rate is an adjustable rate that is pegged to one of the index rates (just like your credit card rate pegged to prime) and adjusts at fixed time intervals depending on the index rate.

SInce the Feds have raised 1.25% interest rate over the last 12 months, all loans pegged to an index are going up in rate.

As for the lender, if you have stafford from an undergrad school, I would keep the lender the same because it will be easier to track paper work for deferral and refinance later on.  The fee charged are pretty much the same 3% across the board.

Re: Stafford Loans
« Reply #4 on: May 05, 2006, 10:52:00 AM »
I just checked out and trying to compare their Stafford Loan offers. All offer the fixed rate, 6.8% Stafford as set by the gov't, but then in addition each offer these extras:

Access Group offers 1 interest rate point deduction (starting at beginning of repayment period) plus if you have automatic withdraw and if you pay on time for 4 years, your rate will then drop to 3.8%.

Northstar (T.H.E. Loans) says that after the 2nd month of repayment they will give you 1.3% of your loan principal back, applied to the interest on your loan. This rate is annualized, so if you have $55,500 in loans at the end of law school, after 2 payments you'll start getting $60.13/mo taken off your total interest amount. (I figured 55,500 x 1.3% = 721.5; 721.5/12=60.125)

Now, I have no idea which of these offers is cheaper in the long run, assuming you have the loan payment directly withdrawn from your checking account every month and never miss a payment. Any math whiz want to advise? TIA!


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Re: Stafford Loans
« Reply #5 on: December 06, 2007, 03:35:28 PM »
somewhat related question: If the school offers you a scholarship, will you still be able to take out the full amount of a stafford loan? Or will you only be approved for the remaining balance of your tuition?