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[Guest]

I have put a lot of time into researching Student loans, unfortunately
I have found out a lot about the rules after I am faced with the
problems.

I attended a college in Florida called Full Sail (ok school, little
pricy especially if you take out loans for living). From this school I
have $60,000 in loans (note above advide for loans for living). My
loans are split into two categories with the one loan company that my
previous loans were sold off to. These categories are Federal and
Alternative loans.

Just when all of my forbearance time was about to run out on these
loans I received a call from Nelnet. Turns out they are no longer
treating these loans as Student loans, other than the Federal ones are
available for consolidation. This makes it so that if I go back to
school I can not defer these loans anymore. Upon calling the company
and asking if this was just done to my account, or all of their
accounts, or just all of their Full Sail graduate accounts. The rep
informed me that this was a measure taken upon only Full Sail students.
Full Sail now uses Salley May. The reasoning for this measure was that
they were not receiving payments on the majority of loans, and were
having too many people push their loans into extended deferment.

Luckily I can pay these loans, but I will be going back to school and
would like to not have them while I am going through that. Since I have
only one lender I can not consolidate. I think I may face future
problems because I allready consolidated my Federal set of loans with
Nelnet. However I have found out that the One lender rule has an
inherant loophole. Just get another loan, with another lender, and you
should be able to consolidate all of them. From what I understand you
have to get a loan paying for at least 6 credit hours... again not a
big deal since I am going back to school.

Any suggestions on how to get these Nelnet loans consolidated before,
or with other loans that I will be taking out for school? Also I am
interested if what Nelnet did is even allowable.

[Steve Blank]

David,

Not exactly clear on all your details, but see if this helps.

Your federal loans have a single lender rule, which means if they are
all taken with the same lender then when you wish to consolidate it must
first be offered to them. If they decline, then you can use any lender.

So if you take a new federal loan through another lender before you
consolidate, then you can consolidate with any lender. But you say you
already consolidated the federal loans. If so, you cannot consolidate
the same loans a second time.

As far as your non-federal alternative loans, what the company can do or
not regarding forbearance and deferments is whatever the terms of the
loan contract are. These are private loans, not government regulated.
Typically, deferments are an option that the bank can allow or decline
as they choose.


Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761

[finaidlawyer]

David,

Steve is correct about the single-holder rule. However, some lenders
will not enforce this rule. If they don't, you can consolidate with
any lender. If you consolidate and then take new federal Stafford
Loans, some lenders will allow you to add the new federal loans into
your consolidation (in essence a reconsolidation). I encourage you to
talk with your lenders directly on this issue.

Finally, for your private loans, take a look at:

1) Key Bank ( http://www.key.com/templates/t-ps2.jhtml?nodeID=H-1.39.b
)
2) Loan to Learn (
http://www.loantolearn.com/apply/apply_consolidate.asp )

Both of these organizations will consolidate private loans. Loan
consolidation of the private loans may not necessarily put them back on
an in-school deferment track so you need to ask the lender and
carefully read the promissory note.

Good luck,

Mark S. Williams
President
Center for Higher Education Support Services, Inc.
616 Culler Court
Wilmington, NC 28409-9149
Telephone: 910.232.1122
Telefax: 866.388.6653
mark@chessconsulting.org
http://www.chessconsulting.org