"Avoid the student loan trap!"
Remember, it's your financial future that's at stake!
Accepting one of those easy to get Stafford Loans can be your worst nightmare after graduation. The Stafford Loan is NOT a low-cost loan. Most have a 3% to 4% "origination fee" deducted from your loan funds just for the privilege of borrowing!
Students continuing through graduate school may borrow up to $138,500. Pharmacy, medical or Vet students can rack up as much as $189,125 in student loan debt.
PLEASE NOTE: The figures in the example below are based on unsubsidized" Stafford Loans. Unsubsidized means you you either pay the interest once a quarter or allow it to accrue and be added to your student loan when you graduate!
TOTAL
INTEREST & FEES FOR UNSUBSIDIZED STAFFORD
LOAN INCLUDING ORIGINATION FEES |
Plan |
Loan |
Interest* |
Mo. Pmts. |
Actual
Payback |
Percentile ‡ |
10 yr. |
$15,000 |
6.80% |
$173 |
$21,210 |
41% |
15 yr. |
$15,000 |
6.80% |
$134 |
$24,570 |
64% |
20 yr. |
$15,000 |
6.80% |
$114 |
$27,810 |
85% |
10 yr. |
$30,000 |
6.80% |
$346 |
$42,420 |
41% |
15 yr. |
$30,000 |
6.80% |
$268 |
$49,140 |
64% |
20 yr. |
$30,000 |
6.80% |
$228 |
$55,620 |
85% |
*
Rates change annually.
‡Payback and percentile figures rounded and includes
3% origination fee.
UPDATE: The Feds are cutting the interest rate on subsidized Stafford Loans to 6% in 2009 and down to 3.4% by 2011. There is still the huge origination fee for the privilege of borrowing the funds.
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