Law School Discussion

Student Loan Cosolidation Questions

Student Loan Cosolidation Questions
« on: March 25, 2008, 12:44:36 PM »
I'm looking to learn more about consolidating my student loans.  Does anyone have any good websites to learn more about the process?

jacy85

  • *****
  • 6795
    • View Profile
Re: Student Loan Cosolidation Questions
« Reply #1 on: March 25, 2008, 02:34:04 PM »
Not yet, but I might after our "exit interview" in a few weeks.

If you go through a lender (and not your school) for loans, you may want to give them a call and see what information they offer.  If my school doesn't provide any good info (and I'm not holding my breath here), that's going to be my next step.

If anyone else has some information to pass on though, I'd be as grateful as the OP.

1LMan

  • ****
  • 129
    • View Profile
Re: Student Loan Cosolidation Questions
« Reply #2 on: March 26, 2008, 02:28:30 PM »
Now isn't a great time to consolidate.  Wait until the rates drop. My college loans are under 3% because I consolidated when the time was right.  In the next 3-5 years they will drop again, but now is a bad time for rates. You will likely end up with like 5-7%, which is pretty much garbage.

Re: Student Loan Cosolidation Questions
« Reply #3 on: March 26, 2008, 03:24:08 PM »
Now isn't a great time to consolidate.  Wait until the rates drop. My college loans are under 3% because I consolidated when the time was right.  In the next 3-5 years they will drop again, but now is a bad time for rates. You will likely end up with like 5-7%, which is pretty much garbage.

That's not true for Federal Consolidation.  The Federal rates are set by statute at the lesser of the weighted average of all your loans' interest rates or 8.25%.  Changes in the Federal Funds Rates will not affect consolidation.

1LMan

  • ****
  • 129
    • View Profile
Re: Student Loan Cosolidation Questions
« Reply #4 on: March 26, 2008, 03:57:10 PM »
Really?  My loans from undergrad are all federal and I have them locked in at under 3%.

Re: Student Loan Cosolidation Questions
« Reply #5 on: March 26, 2008, 05:07:57 PM »
Interest rates do vary but they will never be more than 8.25% for federal loans.  Right now they aren't great.  If you can afford to wait, you might want to.

As far as information about consolidating, go to any of the lenders websites and they give you all the information you need about the process.  If your lender doesn't do them, or you are willing to go elsewhere and have never consolidated before, you might want to shop around for a better interest rate.  Some are higher than others, some charge fees where others don't, etc.

Re: Student Loan Cosolidation Questions
« Reply #6 on: March 26, 2008, 05:27:23 PM »
http://www.finaid.org/loans/consolidation.phtml

when you consolidate federal loans, the rate will be FIXED at the weighted average of your current interest rates or 8.25%, whichever is less.

Once you consolidate, they will not vary.

Re: Student Loan Cosolidation Questions
« Reply #7 on: March 26, 2008, 05:28:29 PM »
Interest rates do vary but they will never be more than 8.25% for federal loans.  Right now they aren't great.  If you can afford to wait, you might want to.

As far as information about consolidating, go to any of the lenders websites and they give you all the information you need about the process.  If your lender doesn't do them, or you are willing to go elsewhere and have never consolidated before, you might want to shop around for a better interest rate.  Some are higher than others, some charge fees where others don't, etc.

You cannot shop around for interest rates.  They are FIXED.  You must mean private loans, not federal.

1LMan

  • ****
  • 129
    • View Profile
Re: Student Loan Cosolidation Questions
« Reply #8 on: March 26, 2008, 05:29:54 PM »
No dude, I only have subsidized and unsubsidized federal loans from undergrad.  When I graduated, I consolidated them together at under 3%.  You CAN lock in a rate for federal loans.  Call FAFSA if you do not believe me.  I could also send you a scan of my bill with the locked in rate shown lol.......

Re: Student Loan Cosolidation Questions
« Reply #9 on: March 26, 2008, 05:36:04 PM »
The rules are different for loans prior to 1998.  Also, if the weighted average of your loans was 3% then that's what you got.

"
Interest rate

The interest rate for FFEL and Direct Consolidation Loans is set according to a formula established by federal statute. The fixed rate is based on the weighted average of the interest rates on the loans at the time you consolidate, rounded up to the nearest one-eighth of a percent. The interest rate does not exceed 8.25 percent. The consolidation rate is fixed for the life of the loan, which protects you from future increases in variable rate loans but prevents you from benefiting from future decreases in variable rates.

Borrowers with Stafford Loans issued on or after July 1, 1995, can reduce the consolidation rate by up to half a percentage point or more by consolidating before the end of the grace period.

If a borrower wanted to consolidate only Direct or FFEL Stafford Loans made between July 1, 1998 and June 30, 2006, the 2007-08 Consolidation Loan interest rate for loans that have entered repayment would be 7.22 percent. To consolidate those same loans during a grace or deferment period, the rate would be 6.62 percent. If a borrower consolidated PLUS Loans made between July 1, 1998 and June 30, 2006, the interest rate for the resulting PLUS Consolidation Loan would be 8.02 percent.

The interest rate you would receive, however, depends on which federal student loans are being consolidated. For example, your rate would be higher if you consolidated a 5 percent Federal Perkins Loan along with a 6.62 percent Direct or FFEL Stafford Loan"

From: http://www.studentaid.ed.gov/PORTALSWebApp/students/english/consolidation.jsp?tab=repaying