I finished grad. school (Ph.D.) in 1999. I had between $20-$30K in Stafford loans. The payments were kind of rough at that point, so I took advantage of consolidation---which was pretty new then, I think. I think I did this through PHEAA, although now the loans are with AES. This let me spread the loans over 20 years instead of 10, which was handy. Since that time, though, interest rates have plummeted. My rate is 8.125%! I am seeing these rates below 3% people are getting now and pulling my hair out. Is there anyway I can rework my loan at a better rate?

My wife, by the way, also has some loans---I'm not sure of the details. I mention this because I have some vague understanding that "reconsolidation" might be possible if we combined our loans. Anyone know details about this?

Another question: After doing a little reading, I now have the impression that the way interests are figured on consolidation loans is by a weighted average of the interest rates on the original loans. Is this correct? I'm trying to figure out why the interest rate on my consolidation loan is over 8%, when my the loans consolidate were all under 4.5%.

I am pretty much in the same boat as you, although after 12 years at university I owed a lot more than you do and my consolidation APR is lower.

I can also no longer deduct ANY student loan interest.

The only tenable option I've found is to put the education debt onto our house and hope to deduct the interest as a HEL or HELOC. The APR for such a loan would actually be HIGHER than my consolidated rate. I am not willing to put this unsecured debt onto our home.

If you reconsolidate your loans with the weighted average you might not be much better off. A HELOC for you might be an ok option because of the lower APR, but just understand the impact of putting unsecured debt on your home.