I am a fourth year medical student. I have been borrowing money via the Stafford loan program for the last 4 years. Each year I have 30K in unsubsidized loans and 8.5K in subsidized loans. I was under the impression that these loans have fixed rate, and my initial rate was 4.7%. When I look up my account all the loans are at the same rate, 6.5%. I never consolidated my loans, and am a tad confused. Does the interest rates on Stafford Loans float with prime? Did the Sallie Mae web site mess up? Can anyone explain this to me. I really thought I understood how it worked, now I am confused.
Until July of 2006, Stafford loans interest rates were adjustable based on the 91-day T-bill.
Since last summer, they’re all issued with a fixed rate, which is now (for most) 6.8%.
They’re dual structure loans, so the interest rate will be lower while you’re still in school and during your 6 month grace period; after that, the rate will probably increase (though it will still be low.)
How is medical school? I’ve been thinking of doing a post-bacc program in science to meet the pre-reqs and have enough knowledge to take the MCAT. I’ve done some research on the web, which tells about the structure of med school, but very little about the human element.
I like it. The first two years are just more of the same, learning the basic sciences. The next two years are learning diagnosis and patient care, which I find to be alot of fun. Overall, I enjoy it and I know I will enjoy practicing medicine. Of course, many of your classmates will be overbearning and obnoxious, but there are plenty of nice and normal people too.
I don’t know why I thought the Stafford rate was fixed. When I consolidate, do I have to use my current lender (all loans are through Bank of America) or can I shop around?
You should be able to shop around. Congress did away with the single holder rule, which allows different banks and providers to compete for consolidation loans. I have about 14k in Stafford loans from my undergraduate years, and I’m always getting letters from official sounding places; the letterhead makes you think it’s coming from the government, but really it’s just some consolidation offer.
Consolidation fixes the interest rate and raises the payment term from 10 years to 30 years, which lowers the monthly payment, but I’m pretty sure there aren’t as many deferment options with a consolidated loan, if one gets in a bind.