Penfed Education Loans

[jazz4cash]

Two of our three children will be in college for the next two years so I have been looking at various options to cover the college account shortfall. I have plenty of bruises from the last 6 years of FAFSA, PLUS, Stafford, etc., etc. and the private loan option is looking pretty good thanks to Penfed Credit Union:

• 7.99 Fixed
• 25k maximum
• 10 yr term (or less)
• Loan disbursed to borrower and can be used for any school related expense.

The gov't PLUS loan rate is currently 8.5%, but then I would have a seperate loan for each child with the possibility of consolidating (for a fee). Lots of fees and other nonsense with these programs.

I applied online at Penfed and got approved in <24 hrs. They did not even ask any details about the students or schools. For all they know, the loan is for one student. I suppose the loan limit could be per student, but I don't need the max loan amount.

 

[wrigley]

Two of our three children will be in college for the next two years so I have been looking at various options to cover the college account shortfall. I have plenty of bruises from the last 6 years of FAFSA, PLUS, Stafford, etc., etc. and the private loan option is looking pretty good thanks to Penfed Credit Union:

• 7.99 Fixed
• 25k maximum
• 10 yr term (or less)
• Loan disbursed to borrower and can be used for any school related expense.

The gov't PLUS loan rate is currently 8.5%, but then I would have a seperate loan for each child with the possibility of consolidating (for a fee). Lots of fees and other nonsense with these programs.

I applied online at Penfed and got approved in <24 hrs. They did not even ask any details about the students or schools. For all they know, the loan is for one student. I suppose the loan limit could be per student, but I don't need the max loan amount.

My understanding is that FAFSA has to be filled out for each student getting ready to attend college regardless of the method of student loan/financing option. I am in the process of sending my last child through college and our experience with Stafford loans have been nothing but pleasant!

Mike

 

[ERD50]

What about a Home Equity Loan or Line of Credit? Our CU is currently offering 6% loans, and 3.25% LOC (variable).

Our son is going to grad school (and getting married in a few months - his WTB is in health-care, should be making good $), these rates look better than what he can get beyond the limited ($8,500) Fed subsidized loan (no interest accumulates until after graduation). So I might take out one of these home loans/LOC and he can owe me. The 6% isn't too attractive to me, I might prefer to just dip into savings and loan to him direct. And the 3.25% is variable, so some risk of rising rates there (but I could just pay up and dip into savings if that happens).

Of course one side of me wants to just stay out of it, and let him be fully independent in this matter. Another side says just keep it simple and make him an interest-free loan, the interest being a gift.

-ERD50

 

[jazz4cash]

My understanding is that FAFSA has to be filled out for each student getting ready to attend college regardless of the method of student loan/financing option. I am in the process of sending my last child through college and our experience with Stafford loans have been nothing but pleasant!

Mike

FAFSA is only required for gov't sponsered loans and grants. Private loans do not require FAFSA. My opinion is that the schools want every student to do FAFSA so they have economic profile of thier student body, so they are very insistent that every fills out a FAFSA. There is also many schools that use alternate criteria to establish "need", but I believe those schools use resources other than US gov't.

 

[jazz4cash]

What about a Home Equity Loan or Line of Credit? Our CU is currently offering 6% loans, and 3.25% LOC (variable).
........................

-ERD50

I agree an HEL is a better option if you can use it and Penfed has something called an "Education Home Equity Loan"- Not sure how they could be different from any other home equity loan. Unfortunately, HEL is not presently an option for us.

 

[ERD50]

I agree an HEL is a better option if you can use it and Penfed has something called an "Education Home Equity Loan"- Not sure how they could be different from any other home equity loan. Unfortunately, HEL is not presently an option for us.

Interesting that they distinguish. I checked again, our CU just has some general statement that says the home equity loan/LOC can be used for home improvements, higher education as a couple examples. Since the loan is collateralized, I *guess* they don't really care what you do with it.

The same CU has separate private edu loans, not very attractive terms, IMO - 6% floor variable.

-ERD50

 

[jazz4cash]

Upon further examination, I think I mis-spoke wrt the Education Home Equity Loan...they simply list HEL as an option under general heading of "Education Loans"