Financial Aid ?

[dds_2024]

I apologize in advance if I sound ignorant, but is the financial aid package we will be receiving just LOAN money? There's no "free" money, essentially. Everything we receive in our financial aid package will need to be paid back?

Also, which type of loan (Direct Unsubsidized Loans, Grad PLUS Loans, or private loans) did you choose and why.

Thank you guys!

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[soonTM]

Yes everything will need to be paid back, additionally there is interest on your loan, so you'll be paying back more than what you've initially borrowed.
The only free money is from scholarships and grants.

 

[dds_2024]

Yes everything will need to be paid back, additionally there is interest on your loan, so you'll be paying back more than what you've initially borrowed.
The only free money is from scholarships and grants.

I see... so essentially it's best to use whatever money you have saved up first before even touching your loan money otherwise interest will accrue as soon as you take it out, correct?

Did you do any private loans? I see that some banks have lower interest rates.. Do you know the benefits of taking out federal vs. private loans?

 

[soonTM]

I see... so essentially it's best to use whatever money you have saved up first before even touching your loan money otherwise interest will accrue as soon as you take it out, correct?

Did you do any private loans? I see that some banks have lower interest rates.. Do you know the benefits of taking out federal vs. private loans?

I am fortunate enough to not require the assistance of loans, and so I am far from an expert on this topic.

As for private vs federal loans, I believe that while private loans may start at a lower interest rate, it can increase over time while federal loans are fixed until the day you finish paying them off. Also, federal loans can be subsidized based on need, meaning the government pays the interest for you while you are in school. Otherwise, interest is charged the moment the loan is disbursed to you.

I may not be 100% right on everything and could missing some other important points, so hopefully someone else can chime in with their thoughts!

 

[Pablo Sanchez]

Something to keep in mind is that the federal government tends to be more flexible with their loans. A private loan servicer is going to demand their money regardless the circumstances. Federal loans offer the opportunity for Public Service Loan Forgiveness, Income Based Repayment, etc. If you look at the current situation, the federal government has paused the accrual of interest on all federal loans due to the Covid-19 outbreak. If you have private loans you can bet yo booty that interest is still accruing.

 

[batman12345]

Private loans have fixed interest rates. But even if their rates are lower, 9 times out of 10 you are better off going with government loans. They are much more flexible and provide a lot of repayment strategies and forgiveness options. Private loans on the other hand do not.

Idk how much you have saved up to throw at dental school expenses, but mathematically yes using your savings first would save you the most money since you’d be taking out loans later, thus less interest and fees accrual.

 

[dds_2024]

THANK YOU ALL FOR YOUR FEEDBACK!!!! @Shummiee @PSUDent18 @batman12345
I was wondering why no one was talking about private loans since the rate was cheaper but now I see that it isn't fixed and isn't as forgiving.
Also, my parents have saved about 60k which only covers half of the first year COA. so i'm hoping it'll save me half a year before I even touch the loan money?

@artist2022 (i think your post might have been deleted) - but I have taken the time to read the links you sent me and I truly am thankful for all of your insight.

 

[dds_2024]

Do you guys think COVID will affect our loan rates? *bittersweet wishful thinking*

 

[batman12345]

Private loans have fixed interest rates. But even if their rates are lower, 9 times out of 10 you are better off going with government loans. They are much more flexible and provide a lot of repayment strategies and forgiveness options. Private loans on the other hand do not.

Idk how much you have saved up to throw at dental school expenses, but mathematically yes using your savings first would save you the most money since you’d be taking out loans later, thus less interest and fees accrual.

private loans do have fixed rates. Can always refinance after graduating or later in life if you wish.

Do you guys think COVID will affect our loan rates? *bittersweet wishful thinking*

Probably, rates are set in May I think so we really just have to wait and see what happens over the next month

 

[artist2022]

private loans do have fixed rates. Can always refinance after graduating or later in life if you wish

Private loans can be fixed or variable: Sallie Mae® Dental School Loan

 

[Pablo Sanchez]

Do you guys think COVID will affect our loan rates? *bittersweet wishful thinking*

Interest rates have been cut to very close to 0 by the federal reserve. The student loan interest rate is based partly off of of the rate set by the federal reserve, so our loan interest rates should be lower than they have been the past couple of years. As @batman12345 said, we will get the official rate in May.

 

[batman12345]

Private loans can be fixed or variable: Sallie Mae® Dental School Loan

Yea never said there isn’t variable. It would be ridiculous to take out a variable rate student loan at this point in a career lol.