Hi all, I’ve read a few separate threads from years past about alternatives to the GradPLUS loans. Now that they’re officially done for new borrowers, does anyone have any recommendations or experiences to share about private lenders? Any that don’t require co-signers, or just ones that won’t gouge me down the line? With my scholarships, the basic federal loan covers tuition with some to spare, but I’ll be in classes full time with 2-3 additional assistantships on top of that. Working part-time seems out of the question, and it’s not a degree program that I can stretch out in any way. Any insight would help, thanks!
Graduate school loans in post-PLUS world
byu/bruckner_in_the_bath inStudentLoans
Posted by bruckner_in_the_bath
1 Comment
No. No one won’t “gauge you down the line.”
Private lenders are not the government. They don’t care about you or your ability to repay. They will bleed you dry in order to get what they are owed. Period.
The need for co-signers will be entirely dependent on your credit and their underwriting standards. All you can do with respect to that is shop around and see what you are offered, in terms of co-signers, interest rates, repayment options, etc.
The idea behind these new federal loan limits is to exert downward pressure on tuition by making people unwilling to borrow more than the government is willing to lend. As well as to limit the extent to which people bury themselves in student loan debt they have no reasonable prospect of ever being able to fully repay with interest.
Because, right now, taxpayers are on the hook for that with IDR plans that forgive unpaid balances after a period of time. Plus PSLF, etc.
The fact that private lenders are unwilling to do that is supposed to give people pause. The extent to which they are successful will depend on the extent to which people like you are willing to finance school and living expenses with private loans, knowing that “gauge you down the line” is in your future.
Just don’t look for any of the features and protections of federal loans to exist in the private student loan market. The only similarity between the two is the virtual impossibility of getting delinquent student loans discharged in bankruptcy.