MFE Financial Aid: How do you pay for the degree?

[DeltaVega]

Happy Holidays Everyone!
Now that we are in the end-of-the-year-start-of-a-new-year mood, I was thinking about my plans for next year till i was faced by a question.
Hopefully I will get into one of the MFE/MS programs i applied to, however I never gave serious thought for how will i pay for it!
I mean I always realized that the bulk of it is going to be loans but how do people usually pay for the degree?
Are there specific scholarships you have to apply to?
Do these schools have any special scholarships that you can apply to (Columbia, CMU, NYU, Cornell, CUNY)
For Loans, do you fill the FAFSA only or are there other sources of loans you have to tap into? I mean you are not only borrowing for tuition but for living expenses as well, i'm not sure federal aid will cover all this... what other borrowing sources do you tap in to

You advice is much appreciated!!
Have a great end to the 2011

 

[Andy Nguyen]

I thought people actually think about how they can finance a program before applying for it so your question sounds like "putting a cart before the horse".
Regardless, my interaction here leads me to believe that most foreign students either finance their MFE degree with their own family money, take a local bank loan (sometimes putting their family house as collateral), or getting some government scholarship (specially if you are from Singapore).
For the US students, federal loan is an option but I would suggest that you consult a professional financial adviser before taking the debt. Many people have their life ruined because they can't repay it.
Just a word of caution.

I paid my own tuition throughout my education so I can't offer much first hand experience as far as taking loan is concerned.

 

[aaronhotchner]

I thought people actually think about how they can finance a program before applying for it so your question sounds like "putting a cart before the horse".

I still haven't considered it past the realization that I am going to take out a very large loan. I have no money to speak of, and in my MIT interview I asked, almost verbatim, if it's true that being able to sign my name qualifies me for all the loans that I would need. Getting an affirmative answer was all I needed.

That said, since I am leaving my finances to the school's office, I expect I'll be paying for my degree with some combination of federal and private loans.

 

[amanda.jayne]

Happy Holidays Everyone!
Now that we are in the end-of-the-year-start-of-a-new-year mood, I was thinking about my plans for next year till i was faced by a question.
Hopefully I will get into one of the MFE/MS programs i applied to, however I never gave serious thought for how will i pay for it!
I mean I always realized that the bulk of it is going to be loans but how do people usually pay for the degree?
Are there specific scholarships you have to apply to?
Do these schools have any special scholarships that you can apply to (Columbia, CMU, NYU, Cornell, CUNY)
For Loans, do you fill the FAFSA only or are there other sources of loans you have to tap into? I mean you are not only borrowing for tuition but for living expenses as well, i'm not sure federal aid will cover all this... what other borrowing sources do you tap in to

You advice is much appreciated!!
Have a great end to the 2011

Some schools offer scholarships/grants - you generally find out if you receive one at the time at which you are admitted.

The federal Stafford loan (FAFSA) is capped at $20,500 per year - the current interest rate is 6.8%
There are also Graduate PLUS loans with no maximum - the current interest rate is 7.9%

You must be a US citizen to be eligible for the Stafford and PLUS loans

 

[DeltaVega]

thank you very much amanda.. very helpful information!!
a question to amanda.jayne and aaronhotchner is where do you get your loans from?
I mean one will take close to $100k in loans, and since the Stafford and Perkins loans are capped, do you get the rest via PLUS loans or go to banks (Chase, Wells Fargo, BofA)
the banks say the interest rate is between 3 and 9% so with a good cosigner you are guaranteed to beat the 7.9% rate from PLUS, are you looking into this? Also when will be a good time to apply for the loans: ASAP, or once you get the admittance letter?

Another point Aaron mentioned is the help you get from the grad school... Would schools help you find loans once you're in (kinda make sense since they want to get paid regardless) or are you on your own basically to finance yourself? Andy is possibly the most knowledgeable about the schools relationship with students' finances.

 

[amanda.jayne]

I've only ever taken out Stafford Loans and the bulk of my debt is at 2.85% so my experience is rather limited in this realm.

It would not be a bad idea to speak with your/your cosigners bank to find out what sort of loans and rates you are eligible for and weigh the worst case scenario (40k @ 6.8% and 60k @ 7.9% + credit card and other debt?) against your "risk appetite" and repayment schedule to see if the ROI makes sense.

The financial aid office will be able to advise you further once you are admitted - you cannot fill out the FAFSA or PLUS documents until then.

in my MIT interview I asked, almost verbatim, if it's true that being able to sign my name qualifies me for all the loans that I would need. Getting an affirmative answer was all I needed.

While, to some extent, this is true for US students, it is crucial to consider whether or not such a decision is rational.

For perspective, I know plenty of unemployed people with advanced degrees in nonsense who owe between a quarter and half a MILLION in student debt. I dare you to model a repayment model.

 

[aaronhotchner]

^ what she said.

The fixed interest rates on bank loans are, from what I've seen, comparable to PLUS loans -- if your credit is decent, banks will likely be cheaper if only because PLUS also charges a 4% origination fee.

I haven't gone through the process, but some quick research indicates that MIT operates a credit union and extends up to $170,000 in loans to Sloan students. Obviously MIT is not every school, but this is at least evidence that some graduate schools are highly involved in their students' financing.

 

[Andy Nguyen]

I haven't gone through the process, but some quick research indicates that MIT operates a credit union and extends up to $170,000 in loans to Sloan students. Obviously MIT is not every school, but this is at least evidence that some graduate schools are highly involved in their student's financing.

I cover that in the MIT MFin wiki here
http://www.quantnet.com/wiki/mit-mfin/#tuition-and-funding-options

 

[Alexander Krosky]

Baruch is pretty much your only option if you have this tight of a budget. I got through on subsidized government loans.