Hi, all!

(altogether now..."HI, STIMPY")

I've posted this news in a topic or two, but thought a general announcement would be appropo....

The Department of Education announced on May 16 that they are permitting students who are in school 1/2 time or greater to consolidate their loans while in school, to take advantage of this year's historically low rate on federal student loans

(From the DOE Information for financial aid professionals website:
www.ifap.ed.gov):

"Permitting Borrowers to Enter Repayment Early

Under the Higher Education Act of 1965, as amended and the Department's regulations, a borrower can request a repayment schedule that provides for repayment to commence at a date that is earlier than six months after the date the borrower ceases to carry at least one-half the normal full time academic workload. If the lender grants the request, the loan enters the repayment period and the borrower waives any applicable grace period. This is the case even if the borrower is currently enrolled in school.

Such a borrower will be eligible to obtain a consolidation loan to repay the loan on which early conversion to repayment was granted, assuming all other eligibility criteria are met. As stated above, the borrower waives any applicable grace period, now and in the future.

If the lender determines that the borrower is still enrolled, the lender can put the loan that will now be in repayment, into an in-school deferment status at the borrower's request. The interest rate on the loan would be the deferment rate. If the borrower consolidates the Stafford Loan, the deferment interest rate should be used in calculating the weighted average interest rate on the consolidation loan."

Here's the link if you want to read the whole thing:
http://www.ifap.ed.gov/dpcletters/GEN0508.html

If you are a student in school, you should take steps to lock in the 2.77% rate you probably have on your stafford loans - rates are DEFINITELY going up, likely somewhere between 2 - 3 %

Don't wait - Consolidate!!

One more thing, Students:

Make sure that you request an in-school deferment after you ask to go into repay. The reason? The repay rate is .6 higher than the deferment/inschool/grace rate. It doesn't look like much of a difference, but it could mean thousand$ over the life of the loan.

How does this work with future loans though? Would you have to re-consolidate to include those (thus possibly raising your interest)? Or, how would that work?

Currently, I think all my interest rates are under 3% (I believe closer to 2% but I could be off...I'm just worried that if I consolidate now, I won't be able to when I get out of college and have like 3 or 4 more loans..

Or do you think it would be best to consolidate those I have now (all through the same lender), then, since I want to switch lenders, consolidate those upon graduation? All my other loans are currently deferred (all but this last semester have already gone through the grace period, as I took the summer and fall off).

can someone simplify this for me? does it mean that you go into repayment, consolidate, then defer, so you can lock in the lower rates?

so does it have to be done thru the gov? (the in-school consolidation)
http://www.dlssonline.com/index.asp

i checked out this site, they do the in-school consolidations. it seems they give you the .25% discount if you enroll in the electronic debit. but they don't offer the 1% discount if you make 36 payments on time.

is it only non-govt consolidation that offers the 1% 36 month discount?
not that it matters much, since it would be in deferment until graduation...

but after graduation, would I be able to "transfer" my consolidation to a place that does the 1.25% discount? or is it not worth the trouble?