| Author |
Message |
George Earl
Guest
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| Posted: Thu Jun 02, 2005 6:13 am
Post subject: Another set of newbie loan consolidation questions |
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Please bear with me - I'm new at this game and my research confuses me
and leaves me with unanswered questions . . .
My daughter just finished her sophomore year and she will continue in
the Fall. So far she has taken out the maximum subsidized Stafford
loan for each of her two semesters. I have taken two PLUS loans
through Sallie Mae which have a current total payback amount of
$7,812.59.
Am I correct that my daughter cannot consolidate her Stafford loans
because she is still attending?
Is there a minimum balance of subsidized Stafford loans that can be
consolidated?
I'm pretty sure I can consolidate my PLUS loans at Sallie Mae - I find
no reference on their site to a minimum balance required. But what
will I gain by doing this?
Will it lock in these two loans at the current consolidation rate?
Will subsequent PLUS loans be issued with the new rate and billed
separately?
Thanks!
George
gearlnospamno@nospamcomcast.net |
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Steve Blank
Guest
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| Posted: Thu Jun 02, 2005 7:13 am
Post subject: Re: Another set of newbie loan consolidation questions |
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Hey George, been a few years since you were here.
I'm not a 100% expert on Stafford and PLUS loans, but see my comments
inserted below.
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761
George Earl wrote:
| Quote: | Please bear with me - I'm new at this game and my research confuses me
and leaves me with unanswered questions . . .
My daughter just finished her sophomore year and she will continue in
the Fall. So far she has taken out the maximum subsidized Stafford
loan for each of her two semesters. I have taken two PLUS loans
through Sallie Mae which have a current total payback amount of
$7,812.59.
Am I correct that my daughter cannot consolidate her Stafford loans
because she is still attending?
|
That has been the rule, but some banks are now willing to let you
request placing the loans into "repayment status", which allows you to
consolidate at the current low rates. Since she will still be in school
no payments are really due, and Uncle Sam continues to pay the interest
until she leaves school. By consolidating you do give up the 6 months
interest-free grace period after she finally leaves school, but the long
term interest savings are worth it. If you consolidate now the rate is
frozen at 2.88% (it's going up to about 5% July 1 and can go higher in
future years).
| Quote: |
Is there a minimum balance of subsidized Stafford loans that can be
consolidated?
|
Some banks do have minimums - you'll have to ask your lender.
| Quote: |
I'm pretty sure I can consolidate my PLUS loans at Sallie Mae - I find
no reference on their site to a minimum balance required. But what
will I gain by doing this?
|
You lock in the current rate at 4.2% or so, while the new rate you'd
otherwise pay as of July 1 would be 6.1%
| Quote: |
Will it lock in these two loans at the current consolidation rate?
Will subsequent PLUS loans be issued with the new rate and billed
separately?
|
Any future PLUS loans you take will be at the then current variable
rate. You'll get either one combined bill, or separate ones depending on
the bank's procedures.
Any consolidation for Stafford or PLUS loans MUST be completed by July 1
in order to get the lowest rates ever, so you need to move quickly. Call
your lender now, ask all your questions, and get it done fast.
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George Earl
Guest
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| Posted: Fri Jun 03, 2005 7:20 am
Post subject: Re: Another set of newbie loan consolidation questions |
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On Thu, 02 Jun 2005 05:23:14 GMT, Steve Blank <steve@randallblank.com>
wrote:
| Quote: |
Hey George, been a few years since you were here.
|
Yes, I have only one in school and after I got my questions answered I
haven't needed to come back . . . :)
| Quote: | That has been the rule, but some banks are now willing to let you
request placing the loans into "repayment status", which allows you to
consolidate at the current low rates. Since she will still be in school
no payments are really due, and Uncle Sam continues to pay the interest
until she leaves school.
|
Hmmm, I'll have to ask Sallie Mae if they are doing this . . .
| Quote: | You lock in the current rate at 4.2% or so, while the new rate you'd
otherwise pay as of July 1 would be 6.1%
Any future PLUS loans you take will be at the then current variable
rate. You'll get either one combined bill, or separate ones depending on
the bank's procedures.
|
Ok, this is what I wanted to know.
| Quote: | Any consolidation for Stafford or PLUS loans MUST be completed by July 1
in order to get the lowest rates ever, so you need to move quickly. Call
your lender now, ask all your questions, and get it done fast.
|
Right. Thanks once again, Steve, for your help . . .
George
gearlnospamno@nospamcomcast.net |
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