Question:
I am a high school senior who got accepted to Berkeley, and I am curently looking for some information about student loans. So far, I got $2670 of Fed Unsub. Direct Loan and about $16000 of Parent Plus loan is it worth taking these loans ?? or is it better off taking a private loan from the bank?

Answer:
Usually the unsub direct Stafford and the PLUS offer better rates than private loans. Both are variable rates with the rate re-set each summer. Stafford's are capped at 8 1/4% and PLUS at 9%. Currently Staffords are 5.99% and the PLUS 6.79%, with origination fees of 3-4%. The rates for 2002-2003 will be set this summer. But in this low interest rate environment there might be better deals to be found. You'll need to find out what the rates, fees and caps are for the other loans in order to make your decision

I am a high school senior who got accepted to Berkeley, and I am curently looking for some information about student loans. So far, I got $2670 of Fed Unsub. Direct Loan and about $16000 of Parent Plus loan is it worth taking these loans ?? or is it better off taking a private loan from the bank?

Government loans usually offer a better deal. I highly recommend coming up with a four-year projection of what your total debt might be after graduation, and how it compares with your likely salary range. Can't speak for your particular school, but tuition has been rising for years and may continue to do so. Also, they may stick it to the seniors more than the freshmen: the seniors don't necessarily have the same ability to go elsewhere instead, and also they are (in theory) closer to being employed. It looks like $18,670 for your first-year debt. If you're talking about a total debt of $80,000 upon graduation, you'll have to make some pretty hefty payments. Many people find they can't keep up with their student loan payments. It becomes essentially a lifetime burden.

I suggest making sure you have a reliable plan for dealing with this potential problem. My daughter got into Berkeley also. She chose not to go there because they didn't give her anything but loans. UC Riverside gave her a full merit scholarship, but Berkeley didn't give her a dime. She is going to a small liberal arts school after all is said and done and not a UC at all because the private school ended up costing A LOT less (half!) than UC Berkeley because of the scholarships they gave her. A lot of times the private schools actually come out less than the public schools. Do you have to pay your parents back that $16,000? You'd come out owing an enormous amount of money. I suppose if you're a CS major you could pay it off, but it's a lot of money. If your parents EFC is really high are they not willing to ist at all? Berkeley is a great school and your job prospects should be pretty good on graduation.