Vocaboly.com

[Guest]

My sons and I have student loans through Citibank which are now in
repayment, no defaults. Before July 1st, 2005, there was a big push to
consolidate loans to take advantage of low fixed rates that might go up
on July 1st. Anyway, applications were submitted and accepted. On
July 12, 2005 we all received a letter from Citibank saying they were
continuing to verify information submitted, but that the consolidation
applications were all submitted timely. On July 28, 2005, I (but not
my sons) received a letter stating that my loans had been consolidated.
To date, September 22, 2005, no further notices have been rec'd from
Citibank, but Citibank verbally confirms that all information has been
received and approval should be forthcoming; no estimate whatsoever is
being offered as to when that might be. The current interest rate is
about twice the consolidation rate, so Citibank has a powerful
incentive to drag their feet. Has anyone else had this problem and
does anyone know of a higher authority or some means of pressuring
Citibank into getting the consolidation payment schedule and interest
rate into effect? FWIW, the committee reports on the consolidation
bill talk about "prompt" approvals for consolidations loans implying
that foot dragging woudl be frowned upon. Of course, that is the same
legislature that provided for the infamous "single lender rule" and
does not require lenders to inform their borrowers as to its existence.

BFR

[Steve Blank]

You could contact the Education Department Ombudsman's office to
complain. I don't have their number, but you probably could get it by
calling the FAFSA information line at 1-800-4FEDAID.

For what it's worth, lenders were swamped with last minute requests for
consolidation, which might explain the delay of the confirmations.

If you have had to continue paying at the current higher rates, I would
think that once you get confirmation of the consolidation you would be
due a refund from the lender for any overpayments.

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

[mjoann]

It is not just you, and not just Citibank. I wont go into many details,
but my consolidation company is giving me the run around too. It has
been 14 weeks, even though they initially told me 6-8. I have called a
handful of times and they give me a different reason each time. For the
first 12 weeks, it was because Direct Loan had not sent my loan information.
Fortunately, I started grad school, so I only had to pay the higher rate
for two months before me deferral kicked in, but I would be incredibly
mad if I was still paying it!

To be honest, though, I am not sure it is really any lenders' fault. In
May and June, it took hours to get though to any of my lenders or my
consolidator on the phone. They were all seriously swamped with record
numbers of phone calls and consolidations (and apparently didn't add
extra workers.) It is very annoying that all of the agencies involved
are taking so long, but it isn't really fair for us to expect super
human speed in face of their highly increased volume.


mjoann