Called Direct loans in an attempt to re-rate my student loans and they told me I was not eligible for the 3.3% rate currently being offered because I have a consolidated account that is fixed at 8.25%. Is there any way I can get this re-rated?

I'm in the same boat. Just because our loans are consolidated shouldn't mean we can't refi. I called tons of places and they said I don't qualify because of my 1996 consolidation. So far, I haven't been able to find a way to get a lower interest rate. If anyone knows something that could help us, please post.

Actually, unfortunately, your consolidation does mean that you can't re-consolidate to a lower rate. You can only consolidate a set of loans once. Congress has tried to change this a few times, but it hasn't passed. If you have other student loans that you haven't consolidated, you can do it that way. However, your interest rate will be the weighted average of all of your interest rates, rounded up to the nearest 1/8th percent. If you have a lot of loans at the higher rate and just one tiny one at the lower rate, that might not do all that much (although, as always, YMMV). If you're married and your spouse has student loans, you could consolidate them together, but that has a TON of negative possibilities (if you divorce, you're stuck with each other's loans and, if one of you passes away, the survivor is stuck with the total amount, even though if they had been kept separate, student loans are automatically dischargeable at death).

Even if you were able to consolidate now (one of the situations above), you wouldn't get the 3.3%. Again, it's the weighted average of your current interest rates, to a maximum of 8.25%.

Hope this helps -- sorry it wasn't great info, though!! Good luck!!

ziggy is absolutely right. I'm going through the hoops of fire to get beyond default/rehab/consolidation on loans that were originally 9%. The best you can do is get them down to 8.25% unless we can get the laws changed.

You may have an option to get a lower rate on your Direct Consolidation - Direct will let borrowers who have consolidated with them to reconsolidate the loans with another company that offers a reduction in the rates as a reward for on-time payments - Companies such as American Collegiate Financial Services (ACFS) offer a 1% reduction in the rate for 36 on time payments - you have to have a 20k balance - and you have to pay on time for 3 years, but it can save you a lot of money in interest, especially if you are consolidated @ 8.25, and the loan stays federally guaranteed

You can 're-consolidate' your loans if you have new borrowing after consolidation such as attending a grad program or post-bacalaureate program for teaching licensure. In essence, you can re-consoldiate your consolidation loans with your new loans. You can use a consolidation calculator to see if consolidation is worth it. You can try one at www.mygreatlakes.com.


I can tell you that word from the Feds is that consolidation loans will be a variable rate beginning as soon as 2006 so your fixed rate may give you some comfort.

My consolidated loan is with Nelnet. I called ACFS and they told me that Nelnet will not let go of their loans to save their lives. But I'm happy to see that some people have a way to lower the interest on their consolidated loans.

are you saying ACFS with refi the loans? not "re"consolidate? I'd love to get out from my 5.4% rate...

hegemony, I'm not sure what you mean by "refi" vs. reconsolidate...the loan remains a federal consolidation loan - the rate is initially the same as you would have with Direct - the 1% redux is considered a reward for ontime payments - so your rate of record would not change - basically, the DOE is allowing those with Direct consolidations to "re"-consolidate under a FFEL servicer, and since FFEL servicers tend to offer Interest rate reductions, this is an opportunity to get the benefits of a rate reduction Direct doesn't offer. Go to www.onestudentloan.com, and you get a pop up saying you may be eligible to "reconsolidate". It's definitely worth looking into, especially if you are stuck with a big balance at a higher rate - Also, if you have used deferment for economic hardship or unemployment, you get that time given back to you, because this is a new loan; depending on how you use the time, this can be a blessing or a curse...

btw forgot to mention - this link: http://www.ifap.ed.gov/dpcletters/FP0407.html
takes you to the "Dear Colleague" letter the DOE sent out stating they will complete loan verification certificates where the borrower has only a Direct Consolidation (or a Direct Consolidation and a Perkins loan) - it seems to indicate this may only be available til the reauthorization of the HEA - time may be of the essence...