Originally Posted by
Casualinterest
Whoaa hold on. Federal loans are not nearly as bad as private loans depending on your decade. Those who were in college from 2000-2010 likely had variable rate private loans because those were the only things offered. At least federal loans are generally fixed.
- Federal loans qualify for hardship forbearance by law, private loans it's by program and at the discretion of the lender.
- Federal loans can be consolidated through the federal consolidation mechanism, private must be through another private loan and lender.
- Federal loans qualify for income based repayment and graduated payment schedules. Private loans do not.
- Federal loans can be forgiven after 25 years on certain payment plans, private loans cannot.
I went years with variable rate private loans because my credit wasn't good enough to get a refi amount that would cover them all, so I was variable between 8%-15% on them. I finally refinanced the one I had left during covid and it went from 12% to 5%... My federals were fixed the whole time at 7%.
I went through school from 2011-2015. I had the complete opposite scenario. Private loans variable were 3.15% fixed was 5%. You can switch your loans over to fixed if the variable rate increases past the fixed. So the fixed rate is a suckers rate. Federal loans were 7-8%.