I think salliemae has me on a variable interest plan
i'm at about 2.8% or something
i graduated in jan. 05 and the package was completed in like june or july
i thought ALL student loans were locked in at whatever the rate was when you graduated,etc
is it possible to transfer my loans to someone else with locked in rates?

Only if you consolidated your loans would they be at a fixed rate. Until then, it's variable and the interest rate is set by the DOE each year for the year following (it's a fiscal year, so the year there runs from July 1 through June 30) whether you've graduated or not. I'm a little confused about what you mean by "the package was completed in june or july." Did you consolidate your loans?

If you haven't consolidated and you want to (there are a lot of benefits to it, not the least of which is the fixed interest rate), then if all of your loans are with SM, you have to consolidate with them. It's call the "single lender rule."

Hope this helps! Good luck!!

I've never heard of this. Almost all of my loans are with Sallie Mae, and I HATE them. I intend to consolidate away from them as soon as I'm done with school. Where can I find info on this?

Thanks


ETA...Sorry, didn't mean to hijack This just caught me completely off guard.

You say that most of your loans are with SM. Is it that most of your loans with SM or all of your loans are with them (this includes just the government-backed ones; if you have private loans, those don't count in this)? If you have even one loan with someone else, then you can consolidate elsewhere.

Hope this helps!! Good luck!!

i consolidated with Sallie Mae
and so far i also HATE them
i completed my application for consolidation in like March or something and they didn't have it done until like July when my first payment was almost due from one of the original loan holders. Now Sallie Mae is handling all of my loans and I think they have me on a variable interest rate plan and everytime I call the customer service ppl are foriegners who act like they don't know what i'm talking about.

My daughter applied for a loan with Sallie Mae. She has had problems since she got her first loan paperwork back and they tried to defer her payments which she did not want and was not what she turned in on her application. Then she gets another copy of her loan paperwork back, still not fixed on the payment part, and I notice she has a variable interest rate. I almost fainted. I don't even want to think what her loan payment will be like in a few months. I'm considering dragging her off to a bank to pay off the initial loan payment to the school. There has to be a better interest rate through a bank even if I co-sign the darned note. Does anyone have a better suggestion? I have better rates on my cc's than she is getting on this "loan".

First of all, is your daughter still in school? If so, it's an automatic deferral. If she wants to make payments, she can still do that. But it's just automatic that the payments are deferred until she's out of school for six months.

It's also automatic that all federally backed student loans are a variable interest rate. It's been that way practically since the beginning of student loans.

No offense, but it sounds like maybe ya'll need to do some homework so that you understand completely what you're doing here. It seems as if you are not familiar with the student loan process ...

She just started school (today in fact). It's a 10 month accelerated program, but when I look at what she may be paying for this loan, it sort of makes me ill. I am not well versed in the studen loan process since I never used one and she thought she was using the best loan available out there. Of course, she took the word of the school's financial advisor who appeared to be more of a salesman than an advisor. I obviously can't deal with any banks today because of the holiday, but I'll work on it tomorrow. I can see any reason to defer anything while she is still working 40 hours a week and going to school.

Sorry, but the lender isn't looking at what her work schedule is. It's SOP and automatic for the deferment to be applied while in school. I would suggest that your daughter contact her lender about making payments before she gets out of school.

I would be surprised if she gets a better interest rate on a personal loan at any bank. How much has she borrowed?

AFAIK you can make payments even with your loan payments deferred.

Most federal student loans, even at a variable rate, should have lower interest than a personal loan. Current rate for in-school, deferred loans is 4.7%. Show me a bank that will beat that. Bankrate.com shows the best private loans to be around 7.5%.


Gratuitous financial advice:
I don't know her particular situation, but if she has any debt other than the loans, then defer the payments and pay the other debt first. If she doesn't have any other debt, then it might make more financial sense to still defer the payments and put the money instead in a nice interest bearing account (like EmigrantDirect Savings [4%]) and earn some interest on that money rather than handing it right back to the guvmint. Plus, once she is done with school she should be able to consolidate and get a fixed rate.

That is unless you have unsubsidized loans, which accrue interest anyway, in which case you probably do want to start making payments (at very least to cover the interest).

Deferred payments are not some evil monster though. They can make a lot of sense. It completely depends on your overall situation though.

As an aside, you mentioned that she is in a 10 month accellerated program? If this is something like University of Phoenix or AIU, be very careful. Those are businesses, not schools, and because they are for-profit organizations they will do crazy things that can cost you in the long run. Keep an eye on them.

They hit her with a 14% compounded daily interest rate. I wouldn't have been so hostile with a 7% rate. It is also my understanding, after a little bit of research, that Sallie Mae is not federally funded or backed and that it became a private loaning institution. Is this incorrect? Because it no longer falls under federal loan regs as it did before, it can sell the "paper" should it so choose, making itself more of a servicing institution. Is that also incorrect?

My daughter doesn't have very much debt with the exception of a loan on her vehicle with a low interest rate. She has no reason to defer any payments.

Sounds like a private loan to me ...

TheZoo, she most definitely has a private loan. Sallie Mae does both private loans and federal loans. I believe in the case of federal loans, the correct term is that Sallie Mae is the 'guarantor', and you also have a lender (usually a bank in the vicinity of the school) and the loan is federally insured.

With a private loan, all bets are off and you are at the mercy of Sallie Mae. I personally think she would be much better off with a federal education loan, if she can qualify.

Thanks for the input. We contacted the three local banks we deal with regularly yesterday and will go see them all tomorrow. She is going to class today. I'll see if she has time to talk to this "financial advisor" before she has to go to work. As a Mom, I feel like I should have been paying more attention to what she was doing, but she has worked since she was a teenager and has had her own bank accounts, credit cards, and has purchased two used cars and paid off the loans on both. After I saw that interest rate, I just wanted to smack her for not asking me first!