[rant]My wife recently graduated from grad school and amassed about 11K in subsidized direct loans. They have a 3% fee but had a 1.5% refund if the first 12 payments are paid on time. Well, oddly enough when we consolidated them with CFS, this 1.5% refund was taken away which pretty much amounts to a pre payment penalty in my book. Direct Loan's explanation was that I didn't make 12 payments. Considering that locking in the grace period rate was the logical thing to do, making 12 payments to them would only be possible if I wanted to pay for a year and then consolidate at a much higher rate. What the #$%^ good is this refund then? Makes no sense. Also, since I had the refund still when the 1098 came out for 2003, only 1.5% of the fees showed as deductible interest. Will the remaining fees show up on my 04 1098 so I can deduct them, or are they gone - or are they something completely different?

What also chaps my hide is that I applied for consolidation in Nov 03 and the grace ended 2/1/04 and CFS failed to pay them off before the grace ended, thus interest accumulated. Additionally, the total of the loan refund that I had taken from me was also more than all my records stated (itemized every loan in quicken) so have no idea what's going on. All in all, this "simple" consolidation process has been a pain in the yass, with many things assumed unfortunately costing me money. [/rant]