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Aaack! Consolidate Loans or You Will Spontaneously Combust!
Memo to college law students: Consolidate your loans now or pay more later.Yeah, that's right. Rates are low, but they're going up on July 1. You wanna pay even more for this already insanely-overpriced education? I don't think so. So what to do? Well, Access says it will consolidate for you. Access owns my soul, so perhaps I'll let them consolidate it, too. But if you don't want to go that route, NPR did a piece on this recently that might have more options. I'm assured that consolidation is possible even if you're still in school, which is a new thing. Probably everywhere you look you'll find banks jumping to help you with this. They know you're going to pay them lots of money over the life of those zillion-dollar consolidated loans. Mmmm. Feeding the machine. Satisfying, isn't it? Ok, so no, but still, what choice do we have? So consolidate your loans already, will you? You can send the money you save right here. ;-) UPDATE: It appears I don't know as much about this as I thought. (Shock!) If you know more than I do about loan consolidation pros/cons/strategies, or know where I (and others) could learn more, please do share!“The rates in effect right now are the lowest in the history of the student loan program,” he said. “It's a once-in-a-lifetime opportunity.”
Posted June 1, 2005 08:30 PM | law school
Okay, I am horrible at all this loan stuff and would love your help. Every consolidation notice I get also says that by consolidating, you lose your grace period. Is there an option that does not steal my 6 months from me? If not...is it worth it? What if I am clerking post-grad? I will presumably not be able to afford making payments immediately. What to do? What to do?
Posted by: Law-Rah at June 1, 2005 10:36 PM
Keep in mind, you can only consolodate *once*... so if you're taking out loans for other stuff, keep that in mind.
Posted by: Dave! at June 1, 2005 11:06 PM
Whoa whoa whoa! What is this "once" of which you speak? Are you saying that if I consolidate now I won't be able to do so again a year from now when I'm finally finished taking out loans? If so, I'm not sure that's really so awful? At least I'd be getting a lower rate on the $100k I owe now.
I hate this stuff. The system certainly makes it easy to borrow, but figuring out the whole payback part is such a chore.
So, um, Law-Rah, I wish I could help but it seems I'm really not the person for that. I've already burned my grace period so that's not a concern for me. Also, since you've only taken out loans for one year, if what Dave! says is true then it might not be worthwhile for you to consolidate now, grace period or no.
Does anyone else have any good resources for explaining all the options and pros and cons of consolidating? If so, please share!
Posted by: ambimb at June 2, 2005 06:04 AM
I'm totally an idiot about this, too. I know Stafford loans have an interest rate cap, so even if rates go up, they can't exceed a certain level (I think 8.25%). Granted, 4% or so is better than that, but knowing there's a cap means I'm not really motivated to act. Foolish of me, probably. My current payments are manageable, so again, no motivation. I'll also have my oldest loans, which were sold to Sallie Mae years ago, paid off in about three years. Why would I want to lump that into the huge sum I owe directly to the US Dept. of Ed.?
I'm also constantly hounded by telemarketers and junk mail to consolidate. Like I'm going to sign up over the phone with some company I've never heard of! (Especially when they've clearly outsourced their telemarketing to India.) Ha! But if I consolidate through Sallie Mae, a company I know, I'll only get the additional interest rate deductions they offer for paying on time, etc. on the loans that I originally had with them--in other words, a mere drop in the bucket of my debt. (Or at least that's what their fine print seems to imply.)
Sometimes I think getting a mortgage was easier.
Posted by: raquel at June 2, 2005 09:57 AM
If you consolidate while in school, you lose your grace period. If you just graduated and are in your grace period and you consolidate, you lose whatever remains of your grace period.
Also, depending on who your loans are with and what the terms are, you may not be able to consolidate. You can definitely consolidate your Staffords, but only if you have more than $10,000 in debt. (That fits most people, but my undergrad debt is below that, so I could not consolidate my current debt. Phooey.)
And raquel is right; Stafford loans hit a cap of (I think) 8.25%. By law, you will never have a higher interest rate on your Staffords. Ever. If you can lock in some ungodly low rate, like 2%, right now, it might be worth it, depending, again, on how much debt you are able to consolidate (remember, those private loans might not be eligible) and how much more debt you'll be taking on.
Just some food for thought.
Posted by: kristine at June 2, 2005 11:27 AM
I consolidated my law school loans recently (graduated in May 2005) and I got a TON of help from www.graduateleverage.com
I don't work for them or anything, I'm just happy with their service.
Posted by: Shelley at June 13, 2005 04:39 PM
I've managed to save up roughly $16058 in my bank account, but I'm not sure if I should buy a house or not. Do you think the market is stable or do you think that home prices will decrease by a lot?
Posted by: Courtney Gidts at November 14, 2005 06:05 PM
I can't believe it, my co-worker just bought a car for $64643. Isn't that crazy!
Posted by: Betsy Markum at December 22, 2005 03:41 AM
