With all the brouhaha about sub prime mortgages and stock market bailouts, it hadn't occurred to me what was going on with interest rates.
Yesterday we got a statement from my son's student loan company, and his loan rate went from 6.5% to 13.625%. (These are two separate loans for different billing periods)
Did interest rates really go up that much? Or did the fact that he got the loan without a co-signer this time put him in a different category of some sort?
Posted by Wendybird (Member # 84) on :
Wow! I don't know. Mine are in forebearance right now but I guess I'd better check tomorrow. Thats a frightening jump.
Posted by fugu13 (Member # 2859) on :
A good chunk of that is being without a co-signer. Your credit rating would probably knock three or four percent off.
Posted by Lyrhawn (Member # 7039) on :
I have one Stafford loan and got a notice a few weeks back that my interest rate had been cut from I something around 7% to something around 3%. I figured that was all those fed rate cuts finally catching up.
All of this stuff is making me nervous, I have to take out a private student loan to cover this semester, and then next semester I should be able to cover it with some combination of federal aid. I'm pretty sure my Uncle will co-sign a loan with me if I ask him too, but I'm wondering how bad the rate will be even with his help now.
Posted by rivka (Member # 4859) on :
quote:Originally posted by Glenn Arnold: Did interest rates really go up that much? Or did the fact that he got the loan without a co-signer this time put him in a different category of some sort?
Rates have gone up on private student loans (whose interest rates are not mandated by law the way federal student loans are), but not that much. fugu is exactly right. (In fact, students without co-signers are finding it increasingly difficult to get private loans, unless they themselves already have good credit.)
quote:Originally posted by Lyrhawn: I have one Stafford loan and got a notice a few weeks back that my interest rate had been cut from I something around 7% to something around 3%. I figured that was all those fed rate cuts finally catching up.
This is a pre-2006 variable rate loan? Part of the drop is because you're back in school. [Edit: deleted incorrect information] They are based on the 91-day T-bill at the time of recalculation, which is much lower this year than last year.
The combination ought to have brought your current rate on that loan down from 7.22% to 3.61%. Neh?
[ October 02, 2008, 11:12 PM: Message edited by: rivka ]
Posted by Lyrhawn (Member # 7039) on :
Yeah that sounds about right. So does that change every few months as the rate is adjusted? This is the first time I think since I first got the loan a couple years ago that I got a letter telling me of any sort of rate change.
Posted by rivka (Member # 4859) on :
The rate changes once a year, on July 1. (And if you go from repayment to in-school deferral or v.v.)
I don't know if they are obligated to notify you of rate changes; I don't think they are. I bet the notice was actually triggered by your change of status, not the rate change.
Posted by Glenn Arnold (Member # 3192) on :
Raymond canceled the loan, and applied for a new one with one of us co-signing. We haven't got the paperwork yet, though.
Posted by rivka (Member # 4859) on :
quote:Originally posted by Glenn Arnold: Raymond canceled the loan, and applied for a new one with one of us co-signing.
Good.
quote:Originally posted by Glenn Arnold: We haven't got the paperwork yet, though.