Law School Discussion

Law Students => Incoming 1Ls => Topic started by: jdmba2007 on May 31, 2005, 11:02:51 PM

Title: Consolidate Your Student Loans NOW... Rule Change
Post by: jdmba2007 on May 31, 2005, 11:02:51 PM
A Must read on a recent rule change from the Dept of education:

http://xoxohth.com/thread.php?thread_id=191039&mc=18&forum_id=2
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: America's Next Top Lawyer on June 01, 2005, 12:44:16 AM
Hey i am a little confused about this. My loans are on deferment right now. So would i still be able to consolidate and continue to keep my loans on deferment?
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 01, 2005, 06:35:21 AM
yes, i believe you have to put them in immediate repayment then another deferment.  I've read over everything I've gotten from my loan co. and the only drawback I see for me (in school deferment I can't ever spell deferment) is that I give up my 6 month grace once I graduate...that means I have to start paying this January.  Not sure what to do. 
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: Trel on June 01, 2005, 10:13:09 AM
I've thought about this...but I only have 8k in undergrad loans and I'm not so sure it's worth giving up the 6 month deferral after I graduate LS.  Anyone else out there have a tiny amount of loans and making this decision?
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: midjeep on June 01, 2005, 10:43:03 AM
I've thought about this...but I only have 8k in undergrad loans and I'm not so sure it's worth giving up the 6 month deferral after I graduate LS.  Anyone else out there have a tiny amount of loans and making this decision?

Yeah I am curious about this too. I only have $5K in loans from undergrad. Also, I graduated May 04 and have been making payments already, how do I defer the loan again? What do I need to do to prove that I am going to law school to qualify for the deferral?
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 01, 2005, 10:53:23 AM
I have about 40k....yikes...and since half of then are Direct Loans, I consolidated with Direct Loan Servicing and get to keep my grace period (so they say).  That should run out in June of '06 and I hope to start LS in August '06 so I can defer again! 

If you consolidate now the first payment isn't usually due for 45-60 days (so August).  I suppose you could make the first payment and then apply for an in school deferment.  Although, I bet you could just ask the co. you coonsolidate with.....
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: America's Next Top Lawyer on June 01, 2005, 11:08:47 AM
yes, i believe you have to put them in immediate repayment then another deferment.  I've read over everything I've gotten from my loan co. and the only drawback I see for me (in school deferment I can't ever spell deferment) is that I give up my 6 month grace once I graduate...that means I have to start paying this January.  Not sure what to do. 

Wow, so no grace period. That 6 months grace period would be beneficial to the many people who wont have jobs at graduation. We never know how that job situation is going to work out. So I guess that I am on the fence with this one.
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 01, 2005, 11:17:49 AM
yea, Sallie Mae said I would have to give up the grace period...Direct Loan Servicing said I could keep it (or it says that on their website) I guess I will see once the application is processed.  That six months is important...I have a job (for three years now) so it is more important for traditional students...
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: _____ on June 01, 2005, 11:36:03 AM
I've thought about this...but I only have 8k in undergrad loans and I'm not so sure it's worth giving up the 6 month deferral after I graduate LS.  Anyone else out there have a tiny amount of loans and making this decision?

Yeah I am curious about this too. I only have $5K in loans from undergrad. Also, I graduated May 04 and have been making payments already, how do I defer the loan again? What do I need to do to prove that I am going to law school to qualify for the deferral?

Two things:

(1) Given that you have only 5k in loans, you probably don't care too much, but the main reason to consolidate now is to lock in your interest rate.  With the incentives lenders offer, you can lock in for UNDER 2%.  This is less than the cost of inflation, meaning that your money would be, in essence, free money.  But you'd have to consolidate NOW, or else the rate will jump up July 1 when the federal student loans are reindexed.

(2) To get the in school deferral, you need to contact your lender (if you have consolidated, it will be tne lender with whom you consolidated your loans; if you have not consolidated, it will be the people at Direct Loans).  They will give you a form, which you take to your school.  The school fills out the form and returns it to your lender, and you're set.  You may have to make one extra payment or something due to the turn around time of the processors, but that's it.  Submit the form, and you're done.
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: _____ on June 01, 2005, 11:39:05 AM
yes, i believe you have to put them in immediate repayment then another deferment.  I've read over everything I've gotten from my loan co. and the only drawback I see for me (in school deferment I can't ever spell deferment) is that I give up my 6 month grace once I graduate...that means I have to start paying this January.  Not sure what to do. 

Wow, so no grace period. That 6 months grace period would be beneficial to the many people who wont have jobs at graduation. We never know how that job situation is going to work out. So I guess that I am on the fence with this one.

Yep--it's a big deal to give up your deferment.  Though I consolidated my loans through CFS PRIOR to the expriation of my 6 month deferment period (almost 2 years ago now), and they didn't make me start paying until those 6 months were up, so maybe it CAN be done... Call CFS and check it out.  (www.CFS.com)

Hope this helps!
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: midjeep on June 01, 2005, 11:54:30 AM
I've thought about this...but I only have 8k in undergrad loans and I'm not so sure it's worth giving up the 6 month deferral after I graduate LS.  Anyone else out there have a tiny amount of loans and making this decision?

Yeah I am curious about this too. I only have $5K in loans from undergrad. Also, I graduated May 04 and have been making payments already, how do I defer the loan again? What do I need to do to prove that I am going to law school to qualify for the deferral?

Two things:

(1) Given that you have only 5k in loans, you probably don't care too much, but the main reason to consolidate now is to lock in your interest rate.  With the incentives lenders offer, you can lock in for UNDER 2%.  This is less than the cost of inflation, meaning that your money would be, in essence, free money.  But you'd have to consolidate NOW, or else the rate will jump up July 1 when the federal student loans are reindexed.

(2) To get the in school deferral, you need to contact your lender (if you have consolidated, it will be tne lender with whom you consolidated your loans; if you have not consolidated, it will be the people at Direct Loans).  They will give you a form, which you take to your school.  The school fills out the form and returns it to your lender, and you're set.  You may have to make one extra payment or something due to the turn around time of the processors, but that's it.  Submit the form, and you're done.

Thanks for the detailed response. Could this be a loop hole: Since I am already making payments, couldn't I technically consolidate the loan THEN obtain the deferred status and keep the 6 month grace period? Just wondering....
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: _____ on June 01, 2005, 12:15:17 PM
I've thought about this...but I only have 8k in undergrad loans and I'm not so sure it's worth giving up the 6 month deferral after I graduate LS.  Anyone else out there have a tiny amount of loans and making this decision?

Yeah I am curious about this too. I only have $5K in loans from undergrad. Also, I graduated May 04 and have been making payments already, how do I defer the loan again? What do I need to do to prove that I am going to law school to qualify for the deferral?

Two things:

(1) Given that you have only 5k in loans, you probably don't care too much, but the main reason to consolidate now is to lock in your interest rate.  With the incentives lenders offer, you can lock in for UNDER 2%.  This is less than the cost of inflation, meaning that your money would be, in essence, free money.  But you'd have to consolidate NOW, or else the rate will jump up July 1 when the federal student loans are reindexed.

(2) To get the in school deferral, you need to contact your lender (if you have consolidated, it will be tne lender with whom you consolidated your loans; if you have not consolidated, it will be the people at Direct Loans).  They will give you a form, which you take to your school.  The school fills out the form and returns it to your lender, and you're set.  You may have to make one extra payment or something due to the turn around time of the processors, but that's it.  Submit the form, and you're done.

Thanks for the detailed response. Could this be a loop hole: Since I am already making payments, couldn't I technically consolidate the loan THEN obtain the deferred status and keep the 6 month grace period? Just wondering....

Given that you've already been paying, you should have already used up your 6 months... I don't think they give you another 6 months, but you could call and find out...
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: jdmba2007 on June 01, 2005, 08:15:10 PM
this is correct. you will not get another six months
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: lisa on June 02, 2005, 08:06:44 PM
Consolidate 'em, that's what I was told by the Fin Aid counseler
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 03, 2005, 07:07:37 AM
i think mine are 2.75...hmmmph
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 03, 2005, 09:06:01 AM
 :-* never say good mathmetician

or speller

Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: jdmba2007 on June 11, 2005, 11:42:05 PM
i think mine are 2.75...hmmmph

that's right.  Actually, I think it's 2.77 if you want to be EXACT about it Maka.

Sheesh.............i still love ya  :-*.

consolidation involves finding the weighted average of your existing student loans (in the case 2.77 as you mention) and then rounding UP to the nearest 1/8 of 1%. The rate will be 2.875%

Of course most lendors will give you a .25% break for automatic payment and a 1% break after 36 months of on time payments.

2.875 - .25 = 2.625% for 36 months then 1.625%!

Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: maka nani on June 12, 2005, 07:12:06 PM
i sure hope they give me that int rate break....i did direct loans though....we shall see!  :D
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: jdmba2007 on June 14, 2005, 12:01:10 AM
i sure hope they give me that int rate break....i did direct loans though....we shall see!  :D

I believe the feds (http://www.loanconsolidation.ed.gov/borrower/brights.shtml) will give you  the .25% discount for automatic payment but not the 1% break for 36 months of on time payments. good luck!
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: jdmba2007 on June 14, 2005, 10:10:05 PM
I found these Georgetown links on the subject today...

http://www.law.georgetown.edu/finaid/loanconsolidation/#still
http://www.law.georgetown.edu/finaid/loanconsolidation/

I think they are informative
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: carpenoctem on June 27, 2005, 08:02:39 PM
So what happens with loans that we take after July 1, 2005? Can we have 'em consolidated as well?
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: MSUDuster on June 27, 2005, 08:20:08 PM
After July 1st you can still consolidate, but at a higher interest rate.

As long as your application is filled out/postmarked by Jun 30, you're ok.

And i screwed myself bad somehow. After my consolidation process was all said and done, i locked in at 3.25% :(. Oh well, it's going to save me apx 3k, so whatever.
Title: Re: Consolidate Your Student Loans NOW... Rule Change
Post by: michael23 on June 28, 2005, 09:36:13 PM
What if all the undergrad loans are subsidized? Once you refi don't you lose the government paying the interest while you are in school? I only have about 10,000 in loans and it seems they would accumulate more in interest while I'm in school if they are not subsidized than they would accrue at a higher insterest rate during repayment.