COMPARING FEDERAL PARENT PLUS TO VSAC’s PRIVATE VERMONT ADVANTAGE LOAN
Are you an undergraduate student considering a private student loan? Or a parent?
Here's what you need to know if you're considering a federal parent PLUS loan or VSAC’s private Vermont Advantage loan.
All students should take out the maximum Stafford loan first.
If you need additional financing beyond the Stafford loan limit, the main choices are:
- federal parent PLUS loans
- private student loans, such as VSAC’s Vermont Advantage loan
There are important differences between the loan types. Here are some things to consider:
|One-time origination fee||4.204%|
for loans with a first disbursement between July 1, 2013, and November 30, 2013
for loans with a first disbursement between December 1, 2013, and June 30, 2014
|0%, 3%, or 5%|
depending on cosigner credit evaluation
|5.6%, 6.0%, or 6.9%|
depending on the repayment option you choose
|Both loans have fixed interest rates that stay the same over the life of the loan.|
With both loans, you accrue interest from the first disbursement and throughout the life of the loan.
|Flexibility during repayment||Has flexible repayment and postponement options.||May provide short-term hardship forbearance at VSAC’s discretion; otherwise regular monthly payments are required.|
|With both loans, you continue to accrue interest if you postpone payments.|
|Parent or cosigner responsibility||Loan is in the parent’s name only, for the life of the loan.||Requires cosigner, who is equally responsible for the loan, but may allow for cosigner release after 48 months of active repayment. Provided the student meets VSAC’s credit criteria, he or she may request that the cosigner be removed from the loan.|
|Death/disability cancellation||Loan debt is cancelled completely if the student dies or if the parent borrower becomes totally permanently disabled or dies.||Loan debt is cancelled completely if the student dies or becomes permanently disabled. If the cosigner dies or becomes permanently disabled, the cosigner is removed from the loan, which remains in the student’s name.|
Contact your school financial aid office for information on borrower benefits that may be available with federal Direct loans.
The bottom line?
Plan ahead for how much you think you’ll be able to repay each month. Consider the overall cost of the loan and the features that best meet your circumstances.