Hi, Everyone!
This is my very first post. I've been lurking the forums for close to a year.
I wanted to know whether anyone knew anything about elimination of the Single Lender Rule which prevents re-consolidation of student loans. It has substantial impact on those who were not able to take advantage of the now lower interest rates.
A family friend received a form mailing from Class Advantage, LLC located in San Diego California. See http://www.classadvantage.org I went to the site and there is a section which reads:
Already Consolidated?
Federal law changes have made refinancing existing consolidated loans a reality. Call today and one of our Loan Specialists can tell you more! 800-440-8664
Does anyone know whether this is true? In the mailing which our family friend received, it indicated that he could lower his interest rate by 1.5%. He is paying at a 10% rate. I told him this is the rate he would receive if he basically got a new student loan and added it to the ones he has, basically a backdoor way to reconsolidate.
All comments are welcome!
Thanks,
Equestrian
Full Version: Elimination of the "Single Lender Rule"
QUOTE(Equestrian1 @ Oct 20 2005, 11:12 PM)
Hi, Everyone!
This is my very first post. I've been lurking the forums for close to a year.
I wanted to know whether anyone knew anything about elimination of the Single Lender Rule which prevents re-consolidation of student loans. The single lender rule has nothing to do with reconsolidating your student loans. The single lender rule deals with consolidation when there is only one lender. Reconsolidation of FFELP consolidated loans is prohibited by the HEA with 2 exceptions. If there is a Federally Guaranteed Student Loan that was either not included in the original consolidation or taken out since the consolidation then you are allowed to reconsolidate. Otherwise you are not. It has substantial impact on those who were not able to take advantage of the now lower interest rates. Not really, reconsolidation does not lower the existing rate. It only offers a rate reduction plan that may or may not have been available when the original consolidation occurred.
A family friend received a form mailing from Class Advantage, LLC located in San Diego California. See http://www.classadvantage.org I went to the site and there is a section which reads:
Already Consolidated?
Federal law changes have made refinancing existing consolidated loans a reality. This is not exactly a true statement. There was no law change, the HEA has not yet been reauthorized so there can be no law change. What happened was that in 2003 there was a re-interpretation of existing law. Also, as I mention in the next paragraph, the only servicer that will release a previous consolidated loan for reconsolidation is Direct Loans. The reconsolidation rate will be exactly the same rate as the current consolidation loan. Call today and one of our Loan Specialists can tell you more! 800-440-8664
Does anyone know whether this is true? The answer is both yes and no. It is true that you can reconsolidate if your consolidated servicer is Direct Loans. However, if your loans are with any other servicer then it is not true. Most if not all of the consolidation companies can offer exactly the same thing. In the mailing which our family friend received, it indicated that he could lower his interest rate by 1.5%. He is paying at a 10% rate. If he is able to reconsolidate, or consolidate anew because of an additional loan, then at worst the starting rate would be 8.25% since that is the cap on new consolidation loans. From there any interest rate reduction programs could lower the rate even further. BTW, the last time a 10% rate was offered on a Federally Guaranteed Student Loan was in the late 1980's. I told him this is the rate he would receive if he basically got a new student loan and added it to the ones he has, basically a backdoor way to reconsolidate.
All comments are welcome!
Thanks,
Equestrian
This is my very first post. I've been lurking the forums for close to a year.
I wanted to know whether anyone knew anything about elimination of the Single Lender Rule which prevents re-consolidation of student loans. The single lender rule has nothing to do with reconsolidating your student loans. The single lender rule deals with consolidation when there is only one lender. Reconsolidation of FFELP consolidated loans is prohibited by the HEA with 2 exceptions. If there is a Federally Guaranteed Student Loan that was either not included in the original consolidation or taken out since the consolidation then you are allowed to reconsolidate. Otherwise you are not. It has substantial impact on those who were not able to take advantage of the now lower interest rates. Not really, reconsolidation does not lower the existing rate. It only offers a rate reduction plan that may or may not have been available when the original consolidation occurred.
A family friend received a form mailing from Class Advantage, LLC located in San Diego California. See http://www.classadvantage.org I went to the site and there is a section which reads:
Already Consolidated?
Federal law changes have made refinancing existing consolidated loans a reality. This is not exactly a true statement. There was no law change, the HEA has not yet been reauthorized so there can be no law change. What happened was that in 2003 there was a re-interpretation of existing law. Also, as I mention in the next paragraph, the only servicer that will release a previous consolidated loan for reconsolidation is Direct Loans. The reconsolidation rate will be exactly the same rate as the current consolidation loan. Call today and one of our Loan Specialists can tell you more! 800-440-8664
Does anyone know whether this is true? The answer is both yes and no. It is true that you can reconsolidate if your consolidated servicer is Direct Loans. However, if your loans are with any other servicer then it is not true. Most if not all of the consolidation companies can offer exactly the same thing. In the mailing which our family friend received, it indicated that he could lower his interest rate by 1.5%. He is paying at a 10% rate. If he is able to reconsolidate, or consolidate anew because of an additional loan, then at worst the starting rate would be 8.25% since that is the cap on new consolidation loans. From there any interest rate reduction programs could lower the rate even further. BTW, the last time a 10% rate was offered on a Federally Guaranteed Student Loan was in the late 1980's. I told him this is the rate he would receive if he basically got a new student loan and added it to the ones he has, basically a backdoor way to reconsolidate.
All comments are welcome!
Thanks,
Equestrian
fla-tan
Fla-Tan,
Thank you for the reply. I'm going to email it to our family friend. I think he completed his degree in 1991. He is working on another degree now and hopefully, he will be able to re-consolidate because he has an additional loan.
Once again, thanks.
Equestrian
Thank you for the reply. I'm going to email it to our family friend. I think he completed his degree in 1991. He is working on another degree now and hopefully, he will be able to re-consolidate because he has an additional loan.
Once again, thanks.
Equestrian
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