Loan consolidation may be an option if you have multiple lenders and/or significant loan debt. It allows you to combine multiple private loans into one new loan. Students must be in repayment or grace status to consolidate. Repayment begins immediately.
Borrowers should beware that they will lose their federal borrower benefits if they consolidate their federal student loans into a private consolidation loan. Borrowers should always use federal loan options first before considering a private loan consolidation.
Students can consolidate with the lender of their choice. However, there are very few lenders that offer private loan consolidation due to the recent credit crunch. Listed below are a few lenders for you to consider.
CitiBank offers the choice of a fixed rate or variable rate consolidation, for more information call Priority Services at 1-800-846-1290.
American Education Services (AES) offers private loan consolidation at a variable rate using Key Bank and National Collegiate Trust as lenders. Click on the link below to access the online application.
www.aessuccess.org/manage/consolidate/private_loan_consolidation.shtml
Please Note: You may need to apply with a co-signer if you dont meet the minimum requirements. Non-certified private education loans cannot be consolidated.
Since interest rates are at record lows it may be wise for you to consider consolidating your loans to a new fixed rate loan.
Posted at April 30, 2008 02:38 PM
Loan consolidation may be an option if you have multiple lenders, variable interest rates, significant loan debt and/or different loan types. It allows you to combine multiple federal loans into one new loan at a fixed interest rate. A federal consolidation cannot include private loans. Students must be in repayment or grace status to consolidate and can consolidate with the lender of their choice.
Most May 2008 graduates will have at least two Stafford loans with variable interest rates currently 6.62%. In 2006, Stafford loans switched from variable to a fixed interest rate of 6.8%. Under the formula used to determine the new rate on a consolidated loan, lenders use a weighted average of the interest rates on all your loans and then round up to the nearest one-eighth of 1 percent. If all your loans have a fixed interest rate there is no interest benefit to consolidate, but if you had older loans prior to 2006, you can benefit by locking in a low interest rate through a federal loan consolidation.
Variable interest rates on federal loans are adjusted annually in July. If you decide to consolidate it is best to wait until after July 1, 2008. It is projected that interest rates on consolidation loans starting in July will be among the lowest ever.
A growing number of lenders are leaving the federal student loan program because it is no longer profitable. Contact your lender first to determine whether or not they still participate in federal loan consolidations.
For more information go to American Education Services (AES)
Eligible loan types
Stafford Loans, Perkins Loans, Health Profession Student Loans (HPSL),
William D. Ford Direct Loans, Grad PLUS Loans
For a list of all your federal loans www.nslds.ed.gov
Loan consolidation offers both benefits and disadvantages.
Benefits:
Fixed interest rate
Single lender
Lower, more manageable payment
Extended repayment period (up to 30 years based on loan total)
Disadvantages:
Longer repayment term
Greater interest paid over life of loan
Interest may be slightly higher that on original loan due to rounding
May lose certain deferment options
May lose current forgiveness benefits
May lose current loan incentives
Posted at April 30, 2008 02:38 PM
Now that you are nearing graduation, you need to focus on student loan repayment. When you signed your Master Promissory Note (MPN) to borrow money to finance your education, you signed a legally binding document, obligating you to repay your loans. These loans must be repaid, even if you do not complete your education, find a job or feel you received the level of education you deserve.
It is your responsibility to notify your lender if you:
Change your name, address, telephone number, social security number or email address
Wish to apply for a deferment or forbearance
Are having difficulty repaying your loans
Enroll less than half-time
Attend a different school
If you are not able to repay your loans you may request a deferment. A deferment is a temporary suspension of repayment and may be granted under certain circumstances. A deferment is not automatic. You must apply for it and be approved.
You may be eligible for a deferment if:
You continue your studies at least half-time
You are enrolled in an approved graduate fellowship program
You are conscientiously seeking, but not able to find employment
You are experiencing economic hardship
You are participating in an approved rehabilitation program for the disabled
You are a member of the U.S. Military on active duty during war, national emergency or military operation
If you are willing, but financially unable to make your payments you may need to consider forbearance. Forbearance allows you to reduce the amount of your student loan payment or temporarily stop making payments. You must apply for it and be approved.
Forbearance enables you to:
Postpone your payment for a short period of time
Extend the time for making payments
Make smaller payments
If you are unable to make a scheduled payment, contact your lender/loan servicer immediately. A missed or late payment will not result in default of your loans. However, consistently missed or late payments will have serious consequences, such as:
You may not be able to borrow funds to buy a car or house.
You may not be able to obtain a credit card.
You could have your federal income tax withheld.
You could have your all or a portion of your paycheck withheld.
You could be sued, owe collection or attorney fees and still be responsible for your loans.
Good record keeping will help to eliminate missed payments. Remember to keep and organize all loan documents as well as your FAFSA and copies of cancelled checks or money orders. You should know what types of loans you have and the name, address and phone number of your lenders. Make sure you document any phone calls and note the person with whom you spoke.
Posted at April 30, 2008 02:38 PM
If student loans were among the financial aid options that enabled you to achieve your education, you must be sure you understand your obligation to repay the funds and your specific responsibilities as a borrower.
The Office of Financial Aid is required by federal regulations to provide you with the name of your lender(s), an estimate of the first loan payment due date and an estimated payment amount for your federal loans. Recently, you should have received a loan exit packet containing this information in your campus box. This is important information and should be kept in a safe place.
Your first responsibility as a pending graduate with federal student loans is to complete an exit counseling session at www.mapping-your-future.org, according to the instructions in your packet. The exit counseling session will provide you with additional information regarding loan repayment, consolidation, deferment, and forbearance options. After you complete this online session, you will have a better understanding of your rights and responsibilities, as well as learn tips for maintaining good credit.
The deadline for completing your exit counseling session is April 15, 2008. The Office of Financial Aid will receive electronic notification once you have completed the exit counseling session. Knowledgeable staff members in the Office of Financial Aid are available to assist you. Please feel free to contact them if you have any additional questions after completing your online exit counseling session.
Posted at April 30, 2008 02:38 PM
Credit is your reputation for paying your debts on-time. The better your credit rating is the more willing companies are to lend you money or lower your interest rates and fees. Having a poor credit rating can be difficult to overcome. It can take many, many years to restore it....
Print out the full tips sheet attached here!
Submitted by the staff of Financial Aid Office.
Posted at April 30, 2008 02:38 PM
Within a year you will likely be making payments on your student loans. Allegheny's Financial Aid office has compiled some helpful information to inform you of your rights and responsibilities:
Guidelines for Loan Repayment (pdf)
Helpful Telephone Numbers (pdf)
Submitted by Sheryle Proper.
For more information, visit the Financial Aid website.
Posted at April 30, 2008 02:38 PM
