Sallie Mae / Uheaa consolidation question

[Guest Chase in the Citi]

I have 3 loans that are owned by Sallie Mae, and I want to consolidate them- I spoke with Uheaa a couple days ago. (Thank you to whoever posted about Uheaa on this board, they have some great benefits.)

 

The csr at Uheaa told me that since Sallie Mae holds all 3 loans, I will need find out if SallieMae will release the loans to Uheaa. I tried to call Sallie Mae today, but they are closed.

 

Anyone have any thoughts on this, will this be an easy task, are there any special things I need to know to get SM to release the loans ?

 

I really want out from under Sallie Mae, they have the absolute worst service I have ever experienced, meanwhile it was refreshing to speak with the Uheaa reps.

[TxQuiltGirl]

Single lender rule applies, and SM is not going to willingly give up the loans. Sorry, but you're stuck with them until the loans are paid off.

[flcleo]

Thanks for mentioning this, I went on to their website and they do have good incentives. I love those interest rate reductions.

 

Under the disadvantages for consolidation loans, they mention that UHEAA consolidation repayment incentives are not as generous as the repayment options for Stafford borrowers. I don't understand what they are saying...maybe it's a typo and they mean this stricly for Perkins loans that are consolidated.

 

I didn't mean to highjack your posting. I'm interested in finding out how easily a lender will release also.

[LynnInMN]

I believe that under the single lender rule, you can only consolidate away from the FFELP lender (which Sallie Mae and UHEAA are)to direct loans if you are opting for the ICR payment plan.

[Guest Chase in the Citi]

Single lender rule applies, and SM is not going to willingly give up the loans. Sorry, but you're stuck with them until the loans are paid off.

 

That's what I figured.

 

Uheaa did mention the single lender rule but also mentioned talking with SM about releasing them. I sure wish there was a work around through the board of education or an advocate of some kind, but as you can see, I don't know enough about this.

 

This is not the news I wanted to hear grrrrr

 

Thank you for the information

[TxQuiltGirl]

I can't speak to this but here is some info I found on the FinAid website

 

http://www.finaid.org/loans/consolidation.phtml

 

 

Single Holder Rule Loopholes

 

The single holder rule is an anticompetitive rule that limits a student's choice of lenders for consolidation. If all of a student's FFELP loans are with a single lender, they must consolidate with that lender. If the student has FFELP loans with more than one lender, they can choose to consolidate their loans with any lender.

 

There are, however, a variety of loopholes that allow a student to bypass the single holder rule. There are also several loopholes that might allow a continuing student to consolidate their loans while still in school even if their lender does not cooperate in granting early repayment status to their loans. These single holder and early repayment status loopholes include certifying the inability to obtain (acceptable) income-sensitive repayment terms, consolidating with the Federal Direct Consolidation Loan Program, obtaining a Stafford Loan from a different lender, consolidating a Perkins Loan into a FFELP consolidation loan (or obtaining early repayment status on a Perkins Loan to qualify as an eligible borrower), and a married couple jointly consolidating their loans. Several of these loopholes have not yet been confirmed as valid by the US Department of education.

[Guest Chase in the Citi]

I can't speak to this but here is some info I found on the FinAid website

 

http://www.finaid.org/loans/consolidation.phtml

 

 

Single Holder Rule Loopholes

 

The single holder rule is an anticompetitive rule that limits a student's choice of lenders for consolidation. If all of a student's FFELP loans are with a single lender, they must consolidate with that lender. If the student has FFELP loans with more than one lender, they can choose to consolidate their loans with any lender.

 

There are, however, a variety of loopholes that allow a student to bypass the single holder rule. There are also several loopholes that might allow a continuing student to consolidate their loans while still in school even if their lender does not cooperate in granting early repayment status to their loans. These single holder and early repayment status loopholes include certifying the inability to obtain (acceptable) income-sensitive repayment terms, consolidating with the Federal Direct Consolidation Loan Program, obtaining a Stafford Loan from a different lender, consolidating a Perkins Loan into a FFELP consolidation loan (or obtaining early repayment status on a Perkins Loan to qualify as an eligible borrower), and a married couple jointly consolidating their loans. Several of these loopholes have not yet been confirmed as valid by the US Department of education.

 

 

 

Thank You!

 

This is very interesting, looks like I have some homework to do. Since I am out of school it appears my choices are limited. Perhaps Uheaa will be able to provide some answers, otherwise I will need to find someone to contact for further guidance. (thinking outloud.)

[whodean]

consolidating with the Federal Direct Consolidation Loan Program

 

This is going to be your best option, do what they call the 2-step, consolidate with Direct and then with UHEAA.

[texasnightowl]

consolidating with the Federal Direct Consolidation Loan Program

 

This is going to be your best option, do what they call the 2-step, consolidate with Direct and then with UHEAA.

 

 

This is what I've just started. I graduated and consolidated with Sallie Mae back in '96 and my interest rate is 9% (ouch!). However, I can "re-consolidate" to Federal Direct and THEN move to UHEAA. Going to Federal Direct gets me down to 8.25%. Then moving to UHEAA gets me down by another 1.25% if I sign up for the Automatic Debit payment which effectively gets me down to 7%. Every bit helps, right?

 

Anyway, read thru this thread at fatwallet for more info on the single lender rule:

 

http://www.fatwallet.com/forums/messagevie...keyword1=single

[tupacbiff]

unfortunately the universities know about this rule and yet they fail to inform students. WHen i proposed this question the the head of financial aid - I was sternly told that I would not be getting an answer.

 

Clearly the loan providers somehow pressure the Universities to not disclose this information.

[LynnInMN]

unfortunately the universities know about this rule and yet they fail to inform students. WHen i proposed this question the the head of financial aid - I was sternly told that I would not be getting an answer.

 

Clearly the loan providers somehow pressure the Universities to not disclose this information.

 

Financial aid officers and schools do not deal with consolidated loans or the rules pertaining to them. The sum of information we had was one pamphlet we included in the students exit interview package.

 

Up until yesterday, I had never heard of "re-consolidation". In some of the senarios set out, loans are starting out as FFELP loans, being consolidated into Direct Loans and then flipped back to being FFELP loans. If this is truly happening, I can only surmise that the DOE will lock down on this practice.

[tupacbiff]

Financial aid officers most certainly advise students of the possibility of consolidation (at least at my school). We had numerous lectures (it was grad school) on financial aid and dealing with loans post graduation. These speakers were always from the big loan companies. You should have seen the looks i got when I asked questions about consolidation that they thought I was too naive to know.

 

call it a conspiracy theory if it makes you sleep better but it happens a lot

[texasnightowl]

Up until yesterday, I had never heard of "re-consolidation". In some of the senarios set out, loans are starting out as FFELP loans, being consolidated into Direct Loans and then flipped back to being FFELP loans. If this is truly happening, I can only surmise that the DOE will lock down on this practice.

 

Well, I assume you mean that the DOE should lock down on flipping the loans back to FFELP from Direct? Before I actually submitted my Direct Loan app to the DOE, I called to make sure I understood the process and the CSR CONFIRMED that this flip back to FFELP from Direct is possible and that companies are doing it. If they get smart, DOE will lock down on the practice. For now, if I can get my interest rate down from 9% to 8.25% (Direct) to 7% (3rd party), then I'm going to pursue it.

[LynnInMN]

Financial aid officers most certainly advise students of the possibility of consolidation (at least at my school). We had numerous lectures (it was grad school) on financial aid and dealing with loans post graduation. These speakers were always from the big loan companies. You should have seen the looks i got when I asked questions about consolidation that they thought I was too naive to know.

 

call it a conspiracy theory if it makes you sleep better but it happens a lot

 

 

Our school was a Direct Lending school and we did not have outside loan companies coming in to lecture our grads. Our exit interviews were held as lectures and we discussed financial and loan management, deferments and forebearances and basic consolidation. They got the consolidation pamphet in their package. Very basic. Nothing was hidden from them. However most of the FA officier at our school had little knowledge of consolidation rules and regs.

[Guest Chase in the Citi]

consolidating with the Federal Direct Consolidation Loan Program

 

This is going to be your best option, do what they call the 2-step, consolidate with Direct and then with UHEAA.

 

 

This is what I've just started. I graduated and consolidated with Sallie Mae back in '96 and my interest rate is 9% (ouch!). However, I can "re-consolidate" to Federal Direct and THEN move to UHEAA. Going to Federal Direct gets me down to 8.25%. Then moving to UHEAA gets me down by another 1.25% if I sign up for the Automatic Debit payment which effectively gets me down to 7%. Every bit helps, right?

 

Anyway, read thru this thread at fatwallet for more info on the single lender rule:

 

http://www.fatwallet.com/forums/messagevie...keyword1=single

WOW! Thank you ever so much, this is a very informative thread that really covers alot of ground.

CB is an awesome source of knowledge.

[tupacbiff]

Lynn whether the FA officers are ignorant about the law or willingly choose to withhold information is no different to me. They should make themselves aware and do their job.

 

I was fortunate to have found this board while in school. I was an informed consumer and because of that got a great deal. I make more in interest from a bank then my loan rate. So I am paying it back as slow as possible.

 

However, when I asked directly the head of FA why students are informed of their consolidation options but not informed that they will never get any deals mentioned if they only use 1 loan company I was told I would not be getting an answer to my question.

 

That means he was either uninformed or knew exactly what he was doing. Either way its clear he was not doing his job.

[texasnightowl]

WOW! Thank you ever so much, this is a very informative thread that really covers alot of ground.

CB is an awesome source of knowledge.

 

No problem! Glad it helps. I didn't know until last week that I could get out from under Sallie Mae, and it is thanks to that thread! Good Luck!

[LynnInMN]

Lynn whether the FA officers are ignorant about the law or willingly choose to withhold information is no different to me. They should make themselves aware and do their job.

 

It has got absolutely nothing to do with being ignorant. With budget cut backs at public schools, we were always short staffed. Consolidating loans was not something we handled. Most officers would simply point them in the right direction. We had enough to deal with awarding aid, revising aid and advising students. Coming from a collection background, I handled all the default issues. I knew more about consolidation than anyone in the department. Being a Direct Loan school, students simply did their consolidation with Direct Loans. If they had questions on current loans, the called Direct Loans. We didn't do much more than give them the phone number.

[tupacbiff]

Lynn i understand it hits home. However,I am speaking of my experience at my university. I am sure it is different everywhere. It is possible that my case is the norm or yours is. I dont think making blanket statements though is the answer.

 

Ultimately, its the students financial future so they should be informed. BUT when a school willfully withholds pertinent information I am suspect. Thats it end of story.

[Guest Chase in the Citi]

Just a post to let everyone know:

 

I called Direct Loan and UHEAA this morning.

 

Even though I fall under the single lender rule category, my three sub Staffords can be released from Sallie Mae to Direct in a time frame of approx 30 - 45 days.

 

I can then reconsolidate to UHEAA without any waiting period. UHEAA's benefits are outstanding.

 

As an added bonus, my hold times weren't bad, and I never had to deal with an offshorian.

 

Buh Bye Sallie! So long, See ya, Adios, Sayonara, Hasta la vista baybeee

 

 

I would have never known about anything like this without the help of the generous family here at CB, my only regret is not knowing about this when my loan rates were at 2.7%

[flcleo]

Does anyone know if the Uheaa interest rate advantages change each year? Will they be adjusted after July 1 or have they always offered these reductions?

 

I want to consolidate with Direct for the ICR, but then I figured I would consolidate with Uheaa once my situation stables to get the rate reductions. I'm wondering if I would have to consolidate with Uheaa before July '06 if there is another rate hike. I hope not, I was hoping that I could stay on ICR for a year at least.

 

As an earlier poster stated...every little bit helps, particularly with larger loan amounts. The interest kills you when you can't repay your loans within 10 years. I feel like I'm moving backwards.

[Guest Chase in the Citi]

Does anyone know if the Uheaa interest rate advantages change each year? Will they be adjusted after July 1 or have they always offered these reductions?

 

A good question indeed !

 

Another question:

If I choose to consolidate after 7.1 , before consol w/ you ie: SM or Direct -- do any existing

benefits change.

 

I am certain a quick call to UHEAA will answer your question -- perhaps 2 calls, as sometimes different csr's give different answers -- (never had this issue with UHEAA) but one never knows....

 

Please post your findings, I am certain we would all like to know !

 

oops -- EDIT, I meant to say "benefits", but the OP's questions still apply.

Edited January 17, 2006 by Chase in the Citi

[flcleo]

I called Uheaa and spoke with a rep...he said he's been there 3 years and they have always offered the following on consolidation loans with them:

 

1.25 reduction with auto debit

 

and another

 

1.0 reduction after 48 months of on time payments.

 

he said that given that rates appear to be going up, he thinks they will always offer this.

[texasnightowl]

Does anyone know if the Uheaa interest rate advantages change each year? Will they be adjusted after July 1 or have they always offered these reductions?

 

I want to consolidate with Direct for the ICR, but then I figured I would consolidate with Uheaa once my situation stables to get the rate reductions. I'm wondering if I would have to consolidate with Uheaa before July '06 if there is another rate hike. I hope not, I was hoping that I could stay on ICR for a year at least.

 

As an earlier poster stated...every little bit helps, particularly with larger loan amounts. The interest kills you when you can't repay your loans within 10 years. I feel like I'm moving backwards.

 

 

ICR is an income sensitive repayment, right? If so, you might want to call UHEAA. The brochure PDF on their website at: http://www.uheaa.org/Brochures/Consolidate.pdf says that they have extended and income sensitive plans.

 

And regarding loans and moving backwards...I have moved backwards. Between capitalized intererest during deferrment/forebearance periods I owe more now than I did when I graduated thanks to that sucky 1996 interest rate. I envy the 2 and 3% rates of today.

[tupacbiff]

Thankfully I graduated at the perfect time and locked in an extremely low rate of 2.875%. I got the UHEAA 1.25% auto pay reduction and will get another 1% after 4 years. So after 48 payments my interest rate will be 0.625%.

 

I am taking my sweet time paying it back since i get more interest then that in the bank. Thanks Uheaa