Student Loan Consolidation

If anyone has any input on consolidating student loans I would greatly appreciate it. I’m at the point where I need to drastically lower my payments and have looked into consolidation, but honestly don’t know where to go. Some websites I have found even have a statement saying that they are not currently able to offer student loan consolidations in the current economic crisis! I owe about $120k! I absolutely cannot afford my payments totaling about $1,200 a month. I need to find a way to consolidate and severely lower that payment.

Does anyone know any companies still offering to help students even though getting loans right now seems to be very difficult?
Thank you for any advice…I’m about to go into panic mode!

Look into hardship deferment.

Thanks for the response, but I’ve deferred as many times as they’ll let me. :frowning: Now I have to pay up…

Moderator’s Note: I think this thread will work better in IMHO than in Great Debates.

I simply did it through the federal government, and they give a number of repayment options (graduated payments, different length plans, etc) and I got a good (terribly good, actually) interest rate, and have been perfectly happy with it.

Seconded re: consolidating through the Feds. IME they are extremely helpful and flexible if you are genuinely having difficulties making the payments (as I did when I ended up with a few thousand in medical expenses not covered by insurance, only a few months after finishinig my grad classes).

I would look to the Feds as others have mentioned. But, they may not be able to consolidate all of your student loans. They only handle Stafford and Ford loans. You have a lot of student loan debt, as you know. If any of that comes from Private loans, it can’t be consolidated.

I found myself in a similar position, though with less outstanding a few years ago. I was able to refinance all of my stafford loans through the Feds on an income contingent plan. This sets my monthly payments based on my income. The interest rate is very reasonable with the Feds. They couldn’t consolidate my Sallie Mae Signature loans though because they are private loans. So, I’m stuck with them at Sallie Mae until I can pay them off. I decided to take the lower payment on the Stafford loans so that I could plow money into the Sallie Mae loans, because the interest rate on the SM loans is awful.

Don’t forget to look at the interest rates that places are offering. Even if you have a low monthly payment, if your interest rate is high, your principal may still be going up.

My understanding is that the student loan interest rate will change on July 1. Considering the economy’s downturn, I’m betting it will go lower. As a result, you might want to wait until after July 1 to consolidate.

Please correct me if I’m wrong, because this is the information that I am currently operating under.

I have a lot of Sallie Mae loans and also have $70k in private loans, sounds like I may be screwed if I can’t consolidate those. The federal ones are manageable because I hardly got any help from the government. I sure hope Obama gives some student loan relief soon!

If your loans are Stafford or Plus Loans you will be eligible for the new public interest/income based repayment plans that are scheduled to go into effect in 2009.

Can’t you consolidate your Sallie Mae loans? That’s what I did; I had the vast majority of my loans through them and got them consolidated right when I graduated in 2005; they gave me an interest rate of 3.175%. Neat thing is I got a letter in the mail this weekend. They decided to just lower my percentage because I’ve made 3 years of on-time payments. Now I’m at only 2.175%! Woot!

Thanks everyone. I’m definitely going to call Sallie Mae this week and consolidate those if I can, and try to consolidate my ETS loans, which are the highest ones.

Myself, I would specifically recommend the William D Ford Federal Direct Loan Program, which I think is included in capybara’s link in post #5.

Can someone please explain to me how these loans are being consolidated into such low interest rate loans? It seems to me that the current “going rates” for Stafford are 6.8% and 8.0% for the PLUS loans, but I often here obscenely low interest rates bandied about. Can someone please explain the discrepancy or how this all works?

Well, I was lucky and consolidated when interest rates were a lot lower and I consolidated before (I believe) July 1st, which is when interest rates for them change. Rates went up a chunk a few days after I locked into my lower rate. So for me, it was probably just good timing. :slight_smile: