Hi all! I'm a graduate student at Columbia University. I’m writing because I’ve become eligible for a loan from Columbia University, which I can take instead of a Graduate PLUS loan. I wonder if, given the conditions of the loan listed below, you think it would be wise to take the Columbia University loan (the main attraction being a 5% fixed rate) or the Graduate PLUS loan:
2. INTEREST. Interest shall accrue from the beginning of the repayment period specified in paragraph 3 at the ANNUAL PERCENTAGE RATE
OF FIVE PERCENT 5%) on the unpaid balance, except that no interest shall accrue during any period described in paragraph 4.
3. PAYMENTS. The principal amount of this Note shall be repaid, with interest, in equal monthly installments during a repayment period
beginning the first day of the sixth calendar month following the date I cease to be eligible for a deferment as provided in section (a) or (b) of
paragraph 4. In the event that I shall become entitled to a deferment as provided in paragraph 4 after the repayment period has begun, the
repayment period shall resume on the date my entitlement to a deferment shall cease. Commencing one month following the beginning of the
repayment period, principal payments shall be made in 120 equal monthly installments on the first day of each month, together with interest on the
outstanding balance, except that if repayment in 120 installments would result in payments, including interest, of less than $30 per month, payments
shall be at the rate of $30 per month.
4. DEFERMENT. Interest will not accrue, and installments need not be paid, (a) during periods in which I am enrolled at Columbia University
(including, for this purpose Barnard College and Teachers College) as a full-time student, (or, if this is Gilbert Fund Loan, as at least a half-time
student), (b) during periods totaling no more than four years during which I am enrolled at an accredited institution of higher education other than
Columbia University as a full-time student (or, if this is Gilbert Fund Loan, as at least a half-time student), (c) during periods totaling no more than
three years during which I am on full-time active duty in the United States Armed Forces, or (d) during periods totaling no more than three years
during which I am in service as a Volunteer under the Peace Corps Act or VISTA under Title I, Part A, of the Domestic Volunteer Service Act. For
the purposes of the preceding sentence, enrollment in a summer session at any institution shall not be included unless I am also enrolled in such
institution in the immediately preceding spring term or immediately following autumn term. Columbia University will determine on the basis of
proof submitted by me whether or not I have met any of the requirements for deferment of payment enumerated in this paragraph.
5. PREPAYMENT. I may at any time, without penalty, prepay all or any part of the principal of this Note, plus the accrued interest thereon. If I
repay more than the amount due in any month, the excess will be used to repay principal unless I designate it as an advance payment of the next
6. DEFAULT. If I fail to make any scheduled payment under this Note by its due date, the entire unpaid indebtedness, including interest due and
accrued, plus any applicable penalty charge or collection cost, may at the option of Columbia University become immediately due and payable. If I
fail to fulfill any of my obligations described in this Note, Columbia University may withhold any rights and privileges to which I may otherwise be
entitled, including registration for study and receipt of diplomas and transcripts.
7. PENALTIES. If I fail to make any scheduled payment under this Note by its due date, I agree to pay a late charge not to exceed 20% of the
Thank you so much for your help.