I've been out of school since '98, and consolidated once I believe in early 99. So, if I read things correctly, there's no way for me to consolidate again, huh? I would love to take advantage of the lower rates.

Not that I'm aware of. You may be able to reconsolidate if you didn't consolildate all your loans at that time or if you have any new unconsolidated loans. But, and this is a big but, the already consolidated loans will not change interest rates. So, if you're paying 7.75 like I am there's no getting out of it other than to pay it off. When I consolidated there were no incentives either, other than direct pay. So, even though I've paid perfectly for 5 years now there is & will be no rate reduction. With my newer loans I just sent for consolidation I'm at 3.42% - .25% - 1% (minus 1% after 36 consecutive ontime payments). Having the old consolidation really, really stinks.

The only way to look at it is the rates aren't that bad considering the default rate. If the market were setting the rates when I consolidated they would have been much higher.

miami

Who did you consolidate with and what is your curent rate? Also, did you leave any of your student loans out, like a Perkins loan for example?


fla-tan

I believe I consolidated in 1999. I am not sure of the interest rate to be perfectly honest. I think it must be relatively low, because my interest only payments on $36,500 of loans are $214.33 / month. They take the payments out of my checking account automatically, and for some reason I don't seem to get regular statements from them.

Another unrelated quirk with respect to these loans, the tax form I got from them this year showed interest paid of around $4,800, when I really only paid around $2600. I have no idea why. Its too bad I couldn't utilize that extra amount as a deduction though.

Ummm, what is probably happening is that you are on an income contingent plan. Most likely the payment you make each month does not even pay the interest on the loan. That's why the statement shows a larger amount than you even paid. They may be capitalizing your interest. Whether they are capitalizing it or not, if I'm right you owe more on your loan at the end of the year than you did at the beginning--and a lot more: $2200.

Another possibility is that your interest rate in uncharacteristically low for a '99 consolidation. However, the paragraph above is much more likely.

I was in the same boat for a couple years. Once I realized what was happening I started paying atleast the interest every month. Now I've paid down several thousand of the principal too.

miami

Again, I need to know who you consolidated with. If you consolidated with Direct loans, there is another possibility. From 10/1997 through early 1999 Direct loans offered a variable rate consolidation program. It was subsequently stopped by the Dept of Ed, but those who have it are in excellant shape right now. The variable rate consolidations, depending on exactly when the consolidation occurred, will have a rate of either 4.22% or 3.42%. There are a few consolidation companies that are able to re-consolidate these loans into a fixed rate consolidation and also add an interest rate reduction program to lower the rate up to an additional 1.25%.

As far at the extra interest showing on your year end statement, it sounds more like an error. If it, and you, are accurate then you whould be paying about 13% interest and that would be very wrong.

Hope this helps you some.


fla-tan

Fla-tan, I think you nailed it on the head. I did consolidate with Direct Loans, and I believe that I did consolidate under a variable rate deal. I guess I'm in a pretty good spot then.



So I might be able to reconsolidate after all? Any idea with who?