Student Loan Consolidation Hot Topics

Effective July 1, 2008…

Variable rate Stafford loan disbursed prior to July 1, 2006, that is IN GRACE (IG) = 3.6%

Variable rate Stafford loan disbursed prior to July 1, 2006, that is IN REPAYMENT (RP) = 4.21%

Variable rate Parent plus loan disbursed prior to July 1, 2006 = 5.01%

* note that any Stafford and PLUS loan that were taken out before July 1, 2006, and has never been consolidated, will have these new rates

* note that with consolidation, these rates are rounded to the nearest 1/8% which would make them:

3.625% Stafford in grace

4.25% Stafford in repayment

5.125% Parent Plus

More interesting findings this week - Student loan borrowers that take advantage of borrower benefit discounts should pay close attention to their repayment schedule to avoid loosing their discounts. Because so many lenders are struggling to stay in business right now, many of them are shortening or removing the late payment grace period. For example, some lenders offer discounts for on-time payments, and previously allowed borrowers to be up to 14 days late before removing the discount. This window is either shrinking or getting completely closed - being only 1 day late in some cases could cause discounts to be removed.

So make sure you stay on top of monthly payments and give yourself a few extra days, or even a week to get a payment delivered. If you have automatic checking account withdrawal setup, be sure to spot check your payments periodically. If you plan on setting up auto payment, note that it usually takes 1-3 billing cycles to get setup, so make your normal payments via check or debit card (over the phone or online) until you can confirm that the auto pay is setup. Also, if you switch banks or checking accounts, make sure and remember to switch your student loan payment(s) as well.

A little extra care and attention could help you save thousands.

The other day I spoke to a lovely woman who has been teaching for a few years in a low income area. While teaching, she went back to school to get her Masters degree to help raise her salary and keep her credentials. After a few years of teaching in a low income area she made a salary of $32,000. Her student loans equaled $50,000.

My suggestion to help manage her student loan debt was to consolidate her federal student loans. I explained to her that if she did not consolidate her monthly payment for her student loans would be about $570 a month for 10 years. It’s obvious that a monthly payment this high is just not possible to manage on a teacher’s salary. By consolidating it would stretch her repayment term to 25 years however there are no early repayment penalties. Her monthly payment once consolidated could be as low $276 a month.

With all of her big plans and obligations like rent, utilities, car payments, and beginning savings, she won’t have to worry about how to make her loan payments once she consolidates. No she is free to pursue her dreams without a dark cloud hanging over her head.

The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans

Student Loan Network

Chilly mornings, early sunsets, and fall foliage…good-bye summer, hello fall! I can easily say that fall is one of my favorite times of year. By now, most of you who are still in college have settled back into your routines - a “minor” adjustment from the lazy days of summer. For those recent graduates, welcome to the world…it’s expensive here. Below are a few tips some recent grads have wrote in about - tips that should help ease the financial burden of life after college.

1. Develop a budget. Nothing can be me more daunting then paying your bills, working part-time, and looking for full-time work. A budget should help eliminate that panic feeling you get when bills are due. Will also save time - you won’t find yourself re-calculating how much money you have each time you see a pair of shoes or new camera you want. Already have a job? Fantastic - but a budget will still help. Don’t forget to set aside some cash for fun things…it will help remind you why you subjected yourself to years of expensive classes.

2. Student loans? Consolidate them - it will help with # 1. Once you enter repayment, which can’t be avoided (trust me, I tried) your loan payments will be very high. Coupled with rent, car payment, credit cards etc… it can become difficult to manage - Consolidation cuts your payment over 55%.

3. Network. If you are moving into a new city/apartment, utilize your Alumni association, already established friends, or social network sites like Myspace or Face book. You’ll find out from people who’ve already made a big move what to do and avoid. Also a great way to get furniture, find a roommate, or land a new job.

4. Sell that junk! Still carting around boxes of CD’s and other useless junk? Try and sell anything you haven’t used in the past 12 months that still has some value. Chances are someone on craigslist will want to buy it. For that stack of CD’s - rip them onto your computer, and make .mp3 back-up discs for redundancy. You can fit hundreds of mp3 format songs on one disc. Now you can sell the remaining cd’s pretty much anywhere.

Any other tips and pointers you may have, please feel free post a comment.

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To all recent spring graduates, I hope your summer is treating you well! I know mine certainly is. We all do so many different things once we graduate - for me, it was some much needed time away from school and work. Some of you started jobs soon after graduating, others are waiting anxiously to head off to grad school, and still a few of you may be somewhere, lost in Thailand, backpacking with friends.

Regardless of what you’re doing, please take a moment and make sure you get your federal student loans consolidated. It’s quick, free, good for your credit, and best of all, saves buckets of cash - which you can use to take a last minute Labor day trip, buy some new work clothes, or spring your friends out of that dodgy jail in Bangkok.

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Quincy, MA (PRWEB) May 31, 2006 — With the final auction of the 91-day Treasury Bill on May 30, 2006, federal student loan rates have been set for the new academic year beginning July 1, 2006. The new rates for federal student loans are:

Stafford Loans for students in school: 6.543%, up from 4.70%
Stafford Loans for graduates in repayment: 7.143%, up from 5.30%
Parent Loans for Undergraduate Students (PLUS): 7.943%, up from 6.10%

These new federal loan rates take effect for existing federal student loans as of July 1, 2006. Borrowers who want to lock in the current rates, which are much lower than the new rates, can do so by consolidating their student loans up until June 30.

“With all of the recent changes in legislation surrounding the federal loan program, there may be some confusion about who this rate increase will affect,” states Jonathan Rudy, Director of Loan Consolidation at www.StudentLoanConsolidator.com. “It comes down to this - if you’re a student or a parent with federal student loans, and you don’t consolidate before June 30, your interest rates are going to increase and you’ll end up paying thousands of dollars more in interest.”

The savings borrowers can expect by consolidating are significant. The average college graduate with $30,000 in federal student loans who consolidates before the deadline, will save more than $6,300 in unnecessary interest - savings that will only occur if borrowers consolidate before June 30.

Should graduates consolidate their student loans? “Yes, absolutely - there’s no question about it,” states Rudy. “With no fees, no credit checks, and cash building borrower benefits, there’s no reason not to consolidate right away. Most importantly, since the new rates are nearly 35% higher, and the time to consolidate at today’s lower rates is nearly gone, borrowers need to act quickly and consolidate their loans today.” Said Rudy.

“When federal student loan rates increased last year, the influx of applications caused major industry wide processing delays - We can’t stress enough how little time is left to apply,” urges Mr. Rudy. “Very often graduates wait until the last minute to file their paperwork and by then, they may not be able to insulate themselves from the rate increase. The earlier you apply, the better off you’ll be.”

Students wishing to file a consolidation application should do so at http://www.StudentLoanConsolidator.com immediately or call (877) 328-1565.

Everyday I get the same questions and emails - students and parents asking if consolidation really saves money and lowers payments…It does - no joke. No strings, no gimmicks, no fees, no bait and switch, it just saves money.

First of all, if you have federal student loans (the ones called Stafford, Perkins or PLUS) then you don’t have to worry about getting tied up in some dodgy consolidation program. Your loans are going to stay within that protective federal umbrella - which grants you deferments, forbearance, graduated, and income contingent repayment options. Second, all of your loans get combined into ONE low monthly payment - up to 60% lower then what you’re paying now. Not to mention that your variable interest rate gets locked, protecting it from the upcoming rate hike on July 1st.

On top of cutting your monthly payment in half, if you sign up for automatic checking account withdrawal, we can reduce your interest rate by .25% - immediately. Keep making that payment on-time for 36 months, and shave off another 1%.

So give us a call, talk with one of our expert loan counselors, and find out how much cash you can save - call 877.328.1565. Or check out our website and even apply online at: www.StudentLoanConsolidator.com.

Jon Rudy
Director of Consolidation
StudentLoanConsolidator.com

… because as of next Friday, you’ll be up a creek without one if you have a two step consolidation. The previous blog post turned out to be a pipe dream. Very sad.

Moral of the story:

Consolidate now. If you have an application from us, return it now.

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Cross posted from the Financial Aid Podcast… Chris here with a detailed summary of Senate Bill 1932. As reported in the press and soon to be news everywhere, Senate Bill 1932 has passed the Senate by a 51-50 vote, with Vice President Dick Cheney casting the deciding vote. For those of you not following the Washington Watch stuff we do on the podcast, here’s what is coming down the road in terms of financial aid changes, beginning July 1, 2006:

1. Stafford Loans will have fixed rates of 6.8%, 1.3% higher than the 10 year average on the current variable loan rates. Bad for students.

2. PLUS Loans will have fixed rates of 8.5%, 2.17% higher than the 10 year average on the current variable rate loans. Bad for students.

3. Elimination of Stafford loan in school interest rates, which currently give a 0.6% discount to students in school or in their grace periods. Bad for students.

4. Increases student loan limits for selected student loans. Good for students. However, does not change aggregate maximums, meaning students will hit maximums sooner, potentially causing them to be ineligible for federal aid for an entire academic year. Bad for students.

5. Allows graduate and professional students to borrow PLUS loans. Good for students. However, those loans will not have any kind of deferment available while students are in school, making them unappealing for students.

6. Establishes a supplement to the Pell Grant for students in high-need areas of mathematics and science, up to $4,000 per year. Good for students.

7. Makes administration of student loan programs discretionary funding instead of mandatory funding. Thus, Congress can zero out the administrative budget of any student loan program, effectively killing it without having to pass politically unpopular votes. Bad for students.

8. Adds a provision for deferral of student loans for active duty military personnel. Good for students.

9. Doubles student loan origination fees. Bad for students.

10. Prohibits students who consolidate their loans with a FFELP lender from reconsolidating with the Direct Loan program. Currently this is allowed and is part of a consolidation program called a “Super 2 Step”, giving students more lender choice. The change in law makes it nearly impossible for students to switch lenders. Combined with the existing single lender rule, students will be locked into loan programs with no hope of changing lenders. Bad for students.

11. Consolidation of student loans for students in school is prohibited. Bad for students.

12. Student loan lenders are not obligated to report student loans to credit bureaus. Bad for students.

13. Allows teachers at private schools to qualify for loan forgiveness. Good for students.

14. Student loan rehabilitation made easier with 9 consecutive payments to pull a loan out of default instead of 12. Good for students.

15. Allows the Department of Education to retrieve IRS tax data on borrowers. Bad for students, especially if you have privacy concerns!

16. Drug related offense ineligibility changed so that you are ineligible for federal aid if your drug offense occured while you were receiving federal financial aid. Good for students.

The net of these changes is that students will be paying more, paying higher rates, and will have far fewer choices when it comes to student loan lenders than ever before. This is bad overall and bad for students, especially those who rely on federal loans for the bulk of their financial aid.

What does this mean for you?

Three things:

1. If you have not already consolidated your federal student loans, do so now. Immediately. Do not delay even a minute. Visit StudentLoanConsolidator.com or call 877-328-1565 to consolidate right now!

2. With loan costs increasing, federal student loans become less competitive contrasted with private student loans. Consider private student loans like Act Education Loans for your education finance needs.

3. Scholarships will become more important than ever as loan programs become more expensive for students.

Cross posted to the Student Loan Consolidation blog!

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That’s right, if you graduated or stopped taking classes on June 1st, then you have just about one week left to consolidate your loans and receive the lower grace period interest rate of 4.7%.

Is it really worth the savings?

If you have $30,000 in student loans, at the current grace period rate of 4.7%, after consolidation you would only pay about $190/month. Once your grace period expires, you will end up paying about $323/month at 5.3%. That’s an extra $1,596 per year!

The experienced team of loan counselors at studentloanconsolidator.com will research your federal loan amounts and put together an estimated quote for your savings. Since time is running short, take advantage of our eSignature function and eliminate mailing and processing delays. Everything can be complete online!

Any questions about your federal loans, or you just want to find out more about consolidation, please call studentloanconsolidator.com at 877.328.1565.

Start the holiday season right by saving some money!