who did u consolidate with???

[kas23]

details: Sallie Mae will re-amortize the loan after the 0.25% reduction, which in my case would save me about $20/month in payment. The 1% reduction is not re-amortized, instead the extra money is applied to prinicipal resulting in a faster payoff.

I just called Sallie Mae (1-800-448-3533) and a representative told me that they will not re-amortize after both the 0.25% or 1% rate reductions. Either way, not re-amortizing after a 0.25% rate reduction is not incredibly important. What I really want to do is qualify for deferment somehow, which is like the ultimate form of re-amortization.

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[bababuey]

Booey:

I'm consolidating with total higher education. I won't qualify for economic hardship while as a resident and so that's going to be about 3 1/2 years of forbearance. They don't capitalize interest during forbearance periods like sallie mae does every quarter. Therefore, it stays as a little pool and you can pay it off prior to capitalization if you can or let it all capitalize once.

Hey bobbyseal:

my fin aid advisor insists that i consolidate with T.H.E... however after doing some number crunching, i realized i would save more with GL or UHEAA. One of his arguments for going with T.H.E. is that nearly everyone will get the .75% bonus, whereas with other companies, stats show only 7% will get the low APRs quoted. He also mentioned stuff about their great service, them being good about deferments, and just a bunch of other little stuff that we will realize after we beging to deal with consolidation companies. Just wanted your thoughts about this...

 

[bababuey]

It basically comes down to the calculators. They way they're doing at THE, I'm going to eat up my 6 month grace period because they don't give you that once you enter repayment. Then, I'm applying for economic hardship after the six months using my current pay stubs. So, I'll qualify for economic hardship for 1 1/2 years. After that I have to use my pay stubs from residency. Since I didn't take out too much in the way of loans, I won't qualify for economic hardship based on the criteria. Frankly, I don't really see it as making too much money. More like not being in as much debt as others.

Hey BObbyseal,

i spoke with a lady at T.H.E.... she said that if i didnt file tax return last year, i would automatically get deferment for the first year atleast. She also said that they would honor the 6 month grace period even with consolidation.

 

[bikerboy]

I just called Sallie Mae (1-800-448-3533) and a representative told me that they will not re-amortize after both the 0.25% or 1% rate reductions. Either way, not re-amortizing after a 0.25% rate reduction is not incredibly important. What I really want to do is qualify for deferment somehow, which is like the ultimate form of re-amortization.

That is interesting. I wonder if whether or not they re-amortize depends on the level of debt. I spoke with the first person at Sallie Mae, who looked up my account and said "You have x amount of loans, so I'll transfer you to our concierge service." Initially I thought, oooh, concierge! white gloves, high roller vegas type service. Then reality sunk in and I realized that I just owe a crap load of money. It was the concierge rep who told me about the reamoritization.

 

[bobbyseal]

Bobbyseal, I am confused about how you are going to qualify for deferement. How are you going to qualify for economic hardship if you did not take out "too much in the way of loans?" My understanding is that your monthly loan payment (based on 10 year payback period) has to be greater than 20% of your pre-tax monthly income. Do you have any secrets up your sleave about qualifying for deferement?

And what are your "current pay stubs?" Did you go out and get a job at Wal-Mart or something before residency?

Yeah, I have a job right now while in school. So, I am using the paystub from that current job as my reason to defer now. I think once I am making a resident's salary, I won't qualify.

 

[bobbyseal]

Hey bobbyseal:

my fin aid advisor insists that i consolidate with T.H.E... however after doing some number crunching, i realized i would save more with GL or UHEAA. One of his arguments for going with T.H.E. is that nearly everyone will get the .75% bonus, whereas with other companies, stats show only 7% will get the low APRs quoted. He also mentioned stuff about their great service, them being good about deferments, and just a bunch of other little stuff that we will realize after we beging to deal with consolidation companies. Just wanted your thoughts about this...

I liked THE because of the noncapitalization of interest during continued deferment, forbearance or in school periods. I'd like to think I can pay off the interest on a monthly basis, but I'm not sure. Therefore, I'd rather have a separate pool where the interest is accruing, but not capitalizing. Sallie Mae capitalizes every quarter.

 

[lindyloohoo]

Hope you all don't mind me joining in on this topic, but what exactly would be wrong with the AMSA consolidation other than the rate. I'm still in school (starting 4th yr in July) and I've got my loan officer at school telling me we need to do all of this consolidation stuff on our own (which is like telling me "why don't you split an atom, it's really not that hard") and AMSA telling me this is easy, do it with us.

I get that I can only consolidate while in school with direct loans through the government. So the AMSA people will help me do this. But when I told my fianaical aid lady at school about this program, she says these programs can't consolidate while in school, they will take my deferment and grace period options away, etc. But the AMSA people said that I will keep my deferment and grace periods.

I'm lost in this process and need help and I can't figure out who to ask. Is there someone I can call at AMSA? Is it just that this loan program is legit, it's just a bad deal? Would I really get that much better of a deal/IE not get screwed by losing deferment/grace periods if I did it all myself?

Thanks

lindyloohoo

 

[DireWolf]

Anyone with Sallie Mae decide to consolidate with T.H.E.?

 

[golgi]

So what's the verdict?

sallie mae or graduate leveredge (AES)?

anyone know people who graduated in previous years who were happy with one or the other?

 

[MS05']

So what's the verdict?

sallie mae or graduate leveredge (AES)?

anyone know people who graduated in previous years who were happy with one or the other?

I just came across this forum and not 10 minutes ago, posted this in the financial aid forum...

So after a long and tiring process I've got loan consolidation narrowed down to Sallie Mae and AES. My understanding had been that with either of these programs that your loan wouldn't be sold (and you wouldn't lose any incentives acquired for making on time or auto payments) and then I came across a statement in Sallie Mae's package...."Sale or Transfer of Loan - The lender may sell or otherwise transfer my loan without my consent...sale or transfer of my loan does not affect my rights and responsibilities under the loan." Page 8 of 9, number 5 on the application.

I don't think that the incentive for making on time payments is a right, so with Sallie Mae you could lose these.

Just wondering if anyone has experience with either of these companies and which way people are leaning in regards to whom to consolidate with....

Anyone have to true answer on whether or not Sallie Mae reamortized after the interest rate reductions?

 

[tlew12778]

I consolidated with SM in 2002. In July of that year, the rates went down and they held off on my consolidation (bc I graduated in December and was in my grace period) in order to disburse my loans with the lower interest rate. Since then the interest rates have come down even further but my loans were not adjusted. Why would they be? That's the whole point of consolidating -- to fix your rate. You can either lose out on it (like if you consolidated a decade ago when rates were high) or you can make out on it (like if you consolidate now and rates go up in the future).

 

[impetigo]

What's this that everyone has been mentioning about "hoping" to qualify for deferment after they consolidate? I'm not sure how deferment works if you consolidate direct loans with a private/non-gov't company (e.g. AES, Sallie Mae). On the DL website the qualifications for residency or economic hardship deferment are clearly listed, but I assume unless you consolidate with the fed gov't you face different deferment options and qualifcation?

It seems that if you're planning to pay off your loans quickly, it would be best to consolidate with DL since deferment is so easy to obtain.

 

[MS05']

I consolidated with SM in 2002. In July of that year, the rates went down and they held off on my consolidation (bc I graduated in December and was in my grace period) in order to disburse my loans with the lower interest rate. Since then the interest rates have come down even further but my loans were not adjusted. Why would they be? That's the whole point of consolidating -- to fix your rate. You can either lose out on it (like if you consolidated a decade ago when rates were high) or you can make out on it (like if you consolidate now and rates go up in the future).

no, I was talking about reamortizing the consolidated package after the rate reductions for auto debit and for the 36 month or 48 month rate reduction for on time payments not so much for reamortizing after market fluctuations.

 

[tlew12778]

no, I was talking about reamortizing the consolidated package after the rate reductions for auto debit and for the 36 month or 48 month rate reduction for on time payments not so much for reamortizing after market fluctuations.

You know, that's a good point. I should call them and ask about that. I just have $xxx auto-debited from my account each month. I never bothered looking at the total interest payment to see if it's changed. Then again, do you think .25% or whatever they are offering will make that big a difference?

 

[kas23]

You know, that's a good point. I should call them and ask about that. I just have $xxx auto-debited from my account each month. I never bothered looking at the total interest payment to see if it's changed. Then again, do you think .25% or whatever they are offering will make that big a difference?

There seems to be a lot of confusion on this thread lately. I'll tackle them one-by-one:

1) yes, after you consolidate, your rates are locked in, period, unless you re-consolidate. And yes, this can be a good thing or a bad thing. For us right now, this is a great thing.

2) Consolidation of student loans through SM, AES, etc... are federally regulated program, not private loan consolidation services. They have the same deferment criteria as DL or any other student loan lender.

3) We want to take as looooooooong as legally possible to pay off these loans because the interest rate is sooooooo low. The quicker you pay of your student loans at the current interest rate, the more money you are giving away. The current rate is about the same as the rate of inflation, so theoretically we are paying no interest on these loans. Plus, if you could put this money into a different investment vehicle (that is getting more than a ~3% return) then you are not only paying no interest on your student loans, but you are gaining money in the process. Think of paying off your student loans quickly as giving a stranger a loan with no interest paid to you. It just doesn't make economical sense.

4) Deferment is good because instead of paying money to strangers for no good reason, you can invest that money. The money invested now will be worth a bundle in 30 years.

5) All deferment criteria for student loans are the same, regardless of the lender.

6) Having 0.25% taken off your interest rate is HUGE. Go on to www.smartloan.com and use a calculator to figure this out over a 30 year period. You will be saving thousands of dollars. And if your payments are reamortized after this rate reduction (in most cases, its not), then you have thousands of more dollars to invest.

 

[MS05']

You know, that's a good point. I should call them and ask about that. I just have $xxx auto-debited from my account each month. I never bothered looking at the total interest payment to see if it's changed. Then again, do you think .25% or whatever they are offering will make that big a difference?

Ya, as Kas mentioned .25% (especially over 30 years) is huge, so imagine how nice reamortizing would be after your rate reduction for ontime payment, that percentage is at least 4 times the amount for auto debit.

The idea of finding something that gives a return of 3% or greater on your money is perfect. Even bank CD rates are commonly at or above 3.50% or 3.75% AND that's only a CD. Find a great mutual fund and you can creep up to 7, 8, 9, 10% or more. This is especially important for us because the money you put aside for retirement compounds and compared to other our peers (MBA, JD, or people who entered the workforce after college) we're behind the eight ball on retirement. True we'll probably make more $ that the above, but we've lost the compounding effects of time!

 

[kas23]

compared to other our peers (MBA, JD, or people who entered the workforce after college) we're behind the eight ball on retirement. True we'll probably make more $ that the above, but we've lost the compounding effects of time!

Yeah, doesn't this piss you off? And they say doctor's have too much money.

 

[MS05']

Yeah, doesn't this piss you off? And they say doctor's have too much money.

And to add injury to insult, we also have the burden of paying off our on average $100,000 (which I still don't believe) loans so not only do we lose out on compounding time, but after getting out of school it's exceedingly difficult to pay into retirement

 

[milunn]

If I were to consolidate with AES do I need to apply with graduate levergae as well.....Or should I first apply with GL and then with AES? Also, anyone with perkins loans not add them to their deferrment due to the loss of subsidy with consolidation? This is a great thread, thanks for all the info!!

 

[MS05']

If I were to consolidate with AES do I need to apply with graduate levergae as well.....Or should I first apply with GL and then with AES? Also, anyone with perkins loans not add them to their deferment due to the loss of subsidy with consolidation? This is a great thread, thanks for all the info!!

My understanding is (someone please correct me if I'm wrong) but graduate leverage really isn't a consolidation company, AES is. GL just advertises to find people who are interested in consolidating and passes their info off to AES for some kinda of finders fee.

I went ahead and consolidated the Perkins just to make my life easier. I know the gov will pay the interest if I didn't, but in the grand scheme of things I don't mind paying the extra interest (really not a large amount) for the ease of mind of knowing it's consolidated and paid.

To continue the discussion of Salle Mae Vs. AES, I talked to the AES people today who said that the consolidated package is re-amortized after each benefit is applied (auto debit and/or on time payments) and Sallie Mae does not do this. I'm not enough of a financial whiz to tell you exactly what this means other than with AES you will pay more of your principal off with each payment and therefore your loan will actually decrease from 30 years to about 23 years. I'm all about not paying any more interest than I have too, I'm sooooo tired of people making money off of my medical education....

 

[argh]

To continue the discussion of Salle Mae Vs. AES, I talked to the AES people today who said that the consolidated package is re-amortized after each benefit is applied (auto debit and/or on time payments) and Sallie Mae does not do this. I'm not enough of a financial whiz to tell you exactly what this means other than with AES you will pay more of your principal off with each payment and therefore your loan will actually decrease from 30 years to about 23 years. I'm all about not paying any more interest than I have too, I'm sooooo tired of people making money off of my medical education....

if you re-amortize fully, the number of payments should remain the same, such that the repayment period is still 30 years. it's when you don't re-amortize that you wind up with larger payoff of principal each month and a shorter (e.g. 30-yr to 23-yr) repayment period.

when interest on debt is potentially under 2% and annual inflation rate is 3-4%, I'm all for the debt. you can make money by parking your loan money in a savings account! (even after taxes)

 

[MS05']

if you re-amortize fully, the number of payments should remain the same, such that the repayment period is still 30 years. it's when you don't re-amortize that you wind up with larger payoff of principal each month and a shorter (e.g. 30-yr to 23-yr) repayment period.

when interest on debt is potentially under 2% and annual inflation rate is 3-4%, I'm all for the debt. you can make money by parking your loan money in a savings account! (even after taxes)

so then, what's the advantage to re-amortization?

 

[kas23]

so then, what's the advantage to re-amortization?

With re-amortization, your monthly payments will decrease with each rate reduction. This is good for people who have a strong enough will to invest the money still in your pocket due to this rate reduction. An example, say your monthly loan payment is $300. After a 0.25% rate reduction, the monthly payment may decrease to about $250 per month WITH re-amortization. It is then up to that individual to take the $50 they would have paid out WITHOUT re-amortization and invest it.

And placing it in a savings account may not cut it. Most savings account are paying out an interest rate of 1% or less. Some very good ones are paying out a little over 3%. Inflation is between 3-4%, but closer to 4%. Throwing the money into a nice, low-risk mutual fund or long-term CD may suffice. Remember, this takes a responsible saver to do this. The money cannot be blown.

Simply put, there are consolidation packages for everyone. People may be drawn to GL/AES due to re-amortization and help with deferment. For me, I am already guaranteed deferment because I will be considered a postdoctoral student at my residency. I don't need help with deferment. I will probably be doing a fellowship, SM gave me the best payment schedule (graduate-5), so I can pay very little over the next five years (after deferment). Due to not having re-amortization, my loan payments will probably end when I have to start paying bills for college.

There are plently of different personal scenarios which will sway one towards one lender and another towards a different lender. There is no wrong way to consolidate - we are being locked into ridiculously low rates - we can't go wrong! Just pick a big name lender, one that will not be bought out or sell your loan. I think once the suits begin to realize they are actually losing money on our loans (because our rates will be sub-inflation rate), they may be very tempted to dump them off. If that happens, we will probably lose our benefits.

 

[tlew12778]

OK I got an answer back from SM:

Please note that your monthly payment amount will not be adjusted when the interest reduction is applied. However, you will save time off your repayment terms. In other words, the interest reduction will speed up the time of repaying back your loans.

 

[Dr. J?]

Who has consolidated using Graduate Leverage's service?

I recently rec'd an e-mail informing me that Edfinancial was their recommendation for me to consolidate my loans. I've seen other people on this forum have been recommended AES. Just wanna hear from anyone who has gone through GL.

Also, just want to be sure that the terms quoted to me are the ones everyone else has been quoted, they are:

* 1% interest rate reduction after 24 timely payments and .25% reduction for electronic payments.
* Guaranteed Grace Period. All applications received before July 1st, 2005 will lock in the lowest rate and retain their full 6-month grace period. To do so the Lender has agreed to suspend payments and pay all subsidized interest.
* Loan Sale Restriction Side Letter. The lender has agreed to forgo the option to sell loans consolidated through our service. We think this is particularly important to ensure accountability and loan terms.
* Borrower Benefit Contract. The lender agreed to legally restrict its ability to change any rate incentive achieved. Given this, you will have legal recourse if your rate incentive were removed. You can view the agreement at the following link: Side Letter <http://www.graduateleverage.com/gco_inschool.pdf>; .

That's a direct cut & paste from their e-mail. I'm looking to get this done soon, since I'm also preparing to sit for USMLE. So, if I could hear from those out there that went with graduate leverage, that would be greatly appreciated, thanks.

 

[kirk002]

Maybe this has already been answered somewhere but if i consolidate right now (i'm a third year med student) and take out more loans this year, can i add those on later? i saw a form on SM website that you can add loan within 180 days? anyone know about this? Thanks

kirk

 

[Etomidate]

Maybe this has already been answered somewhere but if i consolidate right now (i'm a third year med student) and take out more loans this year, can i add those on later? i saw a form on SM website that you can add loan within 180 days? anyone know about this? Thanks

kirk

You have 180 days from the date of consolidation to the date of last disbursement of the loan. However, these new loans will be weighted into your consolidation interest rate.

For example:

1. By consolidating your Stafford loans from the first 3 years of medical school, your locked-in interest rate should be around 2.88%

2. If you consolidate your 4th year Stafford loans in this package within 180 days, your locked-in interest rate would increase. Why? Because the interest rate on the 4th year Staffords will increase on July 1st.

3. So your new locked-in interest rate would be a little higher than 2.88%, possible around 3.2%

 

[kas23]

You have 180 days from the date of consolidation to the date of last disbursement of the loan. However, these new loans will be weighted into your consolidation interest rate.

For example:

1. By consolidating your Stafford loans from the first 3 years of medical school, your locked-in interest rate should be around 2.88%

2. If you consolidate your 4th year Stafford loans in this package within 180 days, your locked-in interest rate would increase. Why? Because the interest rate on the 4th year Staffords will increase on July 1st.

3. So your new locked-in interest rate would be a little higher than 2.88%, possible around 3.2%

Quick note: consolidation rates can only be multiples of eighths. That is, 2.875, 3.00, 3.125, 3.25, and so on. And the rounding is upwards. So for those of you 3rd years locked in at 2.875, as soon as you borrow another penny, your rate will rise to at least 3.00.

 

[spacetygrss]

For those of you who have consolidated your loans did you include your Perkin's loans in the package or did you keep the Perkins separate?

I'm mulling over what to do.

Thanks.

 

[GeneGoddess]

I consolidated my Perkins (I doubt I'd ever be eligible for discharge), but only because they will be at the 2.77% rate like my Staffords (AES via GL).

 

[DireWolf]

I consolidated in-school with SM.

I would not consolidate Perkins loans because right now the interest rate is 5.5%, which will be weighted into your consolidation rate. Therefore, instead of 2.875%, your rate would probably increase to at least 3.0%

 

[maximuum]

I was also considering consolidating in-school with THE. Their incentive is an immediate .75% reduction in rate with no penalties. I was wondering how people weighed the pluses and minuses of this versus .25% auto debit reduction + 1.00% reduction with 36 on-time payments. Also, does capitalization of the interest rate mean that basically any interest on the current loan is added into a separate pool than the loan itself? Hence, there isn't compounding of the loan+interest, just the loan itself??

 

[kas23]

Also, does capitalization of the interest rate mean that basically any interest on the current loan is added into a separate pool than the loan itself? Hence, there isn't compounding of the loan+interest, just the loan itself??

What you describe here is the exact opposite of capitalization. Capitalization is when they ADD the interest accrued to the capital of the loan. Say, you owe 100K and have an interest rate of 3%, by years end (or depending when they capitalize the interest), you will owe 103K and then you will accrue interest on the 103K at 3%. And so forth. If they capitalize the interest every quarter, then it is a different story and the interest compounded (and capitalized again) will be higher.

 

[deleted4401]

It's true that if you consolidate the Perkins, the interest rate goes up, but it is a weighted increase.

i.e. if you owe $160,000 Stafford at 2.77% and $10,000 Perkins at 5%, your new interest rate for the combined $170,000 is 2.9%. It's essentially the same thing, unless you are somehow able to afford to pay the Perkins off faster than your lower interest loans. Otherwise, it makes sense to consolidate the loan, as far as I can tell.

By the way, funny story when I spoke to the GL rep: I told him I considered the UHEAA loan, and I wanted him to break it down for me vs. GL. He did all the calculations for me on a spreadsheet and showed me that UHEAA was more than marginally better. He then said if I couldn't get UHEAA to promise the benefits (the interest rate reductions) than I was forced to assume a big risk. He said if I took the UHEAA offer, he'd buy me dinner at the fanciest restuarant I could think of if within the next 3 years they didn't change their terms. If they did, I owed him. I think I'm doing GL. Anyone up for the bet? I'll let him know

Also, SM is a good deal with the immediate benefit (0.75 reduction) ... Especially for people like me that aren't great with paying bills. But, with GL hounding you about not missing your first payment (the rep said that 80% that lose their benefits lose it b/c of that) and setting up auto-pay (so, unless your bank blows up, you should make your payment on time), and the fact that you get 30 days after the due date to make the payment, it seems that it is a good risk to assume. I'm going to talk to some other people about it.

Simul

Simul

 

[j_sde]

regarding AES/ Graduate Leverage...

I was going to go with them, simply cuz AES is my lender already, and the promised GL benefits are competitive.... however, so far, i've had nothing but headache with the GL/AES consolidation process.

First, their online application is terrible. Once you complete the application, your information is not accessible by yourself until the loan is disbursed. I want to be able to look up the accuracy and progress of my application. can't do that.

Second, the GL people took 2 weeks to send me a copy of my application (which I requested to see on paper before signing).... and there were multiple errors on it, despite my having input the correct info on their online application. What kinda errors? WEll, they put down the incorrect loan amount of my unsuby staffords.... incorrect increase by a few hundred. also they did not include my perkins in the consoidation.

Interesting, two days after i got the completed GL consolidation application... I recieved a completed consolidation application from AES. Funny thing is... the numbers on the AES paper were different than the GL paperwork. THe AES was wrong on the loan amount too (but by less than $100).... but... wouldn't you think GL and AES would have the same numbers, given they are working together?

Infact, the GL/AES partnership has been difficult to manage ... yes, some reps at GL are knowledge, but there are some others (infact, one of who was a founder there) who are piss poor at best... basically you have to sort out the discrepancy in words/promises of the 2 companies. I'm concerned that once GL fullfills their commission referal payouts from AES, that they will drop the ball on us in regards to their benefits/ promises to help with deferal (btw, they really can't help with hardship deferal application since its AES that is gonna be the final say on that), etc.

I havent completed the consolidation yet, since i'm still trying to get all the incorrect info resolved.... however, i'm tempted to go with UHEAA if their service personale is any better than GL/AES thus far.

 

[bababuey]

regarding AES/ Graduate Leverage...

I was going to go with them, simply cuz AES is my lender already, and the promised GL benefits are competitive.... however, so far, i've had nothing but headache with the GL/AES consolidation process.

First, their online application is terrible. Once you complete the application, your information is not accessible by yourself until the loan is disbursed. I want to be able to look up the accuracy and progress of my application. can't do that.

Second, the GL people took 2 weeks to send me a copy of my application (which I requested to see on paper before signing).... and there were multiple errors on it, despite my having input the correct info on their online application. What kinda errors? WEll, they put down the incorrect loan amount of my unsuby staffords.... incorrect increase by a few hundred. also they did not include my perkins in the consoidation.

Interesting, two days after i got the completed GL consolidation application... I recieved a completed consolidation application from AES. Funny thing is... the numbers on the AES paper were different than the GL paperwork. THe AES was wrong on the loan amount too (but by less than $100).... but... wouldn't you think GL and AES would have the same numbers, given they are working together?

Infact, the GL/AES partnership has been difficult to manage ... yes, some reps at GL are knowledge, but there are some others (infact, one of who was a founder there) who are piss poor at best... basically you have to sort out the discrepancy in words/promises of the 2 companies. I'm concerned that once GL fullfills their commission referal payouts from AES, that they will drop the ball on us in regards to their benefits/ promises to help with deferal (btw, they really can't help with hardship deferal application since its AES that is gonna be the final say on that), etc.

I havent completed the consolidation yet, since i'm still trying to get all the incorrect info resolved.... however, i'm tempted to go with UHEAA if their service personale is any better than GL/AES thus far.

Have you checked out T.H.E.????? The financial advisor at my school swears by THE. Apparently according to him, although many companies offer great rates, only a small percentage of people actually end up getting these rates for various reasons. I think there was a study done and it found that only 7% of people get these great promised rates. THE has a history of over 95% (or somewhere in mid 90's) applicants who get their "bonus". (the bonus is their way of giving us low rates). Apparently my friends at some other medical schools have heard very simliar things at their schools. IN this forum however, i have only hear about GL/AES and UHEAA. Got any oppinions???

 

[samsoccer7]

The last post poses a good question.

Also, I was planning on going with access group for my loans, b/c they do the .25% reduction with autopayments, 36 months gets you another 1%, and after 12 more months on time, ANOTHER 1%. You also don't lose your 6 month grace period on staffords. Somebody please tell me why I should go with AES instead? I'm truly asking, b/c I have no clue. Also, with "minimal" debt (less than 50K, more than 25K), will I still be able to qualify for forebearance?

 

[Dr. J?]

I talked to one of the founders at GL last week. He stayed on the phone for me for 28 mins talking to me about my options. One of the first things I wanted to know was: what is in it for GL? His reply was as stated in their web-site (www.graduateleverage.com). That the whole situation stemmed from a conversation that was had during class one day about consolidating their loans post-graduation, nobody knew jack so they came up with a project to research the industry. Presented to the class, got the credit and didn't think much of it. Then they rec'd a call from the med school (or law school, one of them) asking if they would come present what they researched to the graduating seniors, things snow-balled and they realized that they may be on to something. The whole idea behind GL is to use "collective bargaining" to "leverage" better bene's from lenders. Great, but how does GL make out on this? Well, the founder told me that all school loans are subsidized by gov't. So, even though we pay 2.87% on our loans, the bank gets an additional margin added by Da G. During the "collective bargaining" Graduate Leverage negotiates to receive part of that subsidy in return for facilitating the transaction between grad students (read "low risk / high return borrowers") and traditonal student loan providers (read "Sallie Mae, American Educational Service, Great Lakes Higher Ed, KHEAA, Ed Financial, etc.). So, indeed, "the butcher does not butcher meat out of the kindness of his heart".

Their recommendation for out of school students is to go with AES (has something to do with Perkins Loan rates - I don't know anything about this). For inschool consolidation, they recommended EdFinancial (they're out of TN, I ckd the BBB and they are legit). I am still looking for anyone else who went with GL or is thinking about it. After reviewing their website, talking to one of the founders (who by the way gave me his cell number to call back directly if I needed) and seeing what else is out there, I'm going to roll with GL.

One more quick question, does anyone know what was the initial event that sparked this end-run around the current inschool prohibition of consolidating? I'm sort of curious.

Hope this helps. Keep up the exchange of info - this might help save someone thousands of dollars!

 

[Dr. J?]

Another thing, for those of you who are currently in school - be careful about who you consolidate with and who you take your final years loans with...

Reason: The current climate of policy in regards to the student loan industry is pretty dynamic. There is talk about allowing consolidation of consolidation loans, allowing the rates to float with the market and possibly doing away with the "single-lender-rule" (see below). So, you need to be up on this stuff or be prepared to try to outwork your financial miscues later (which doesn't work by the way).

Example of how consolidation NOW may effect LATER (only for those in-school):

I currently fall outside the "single-lender rule" (which is part of a fed law on student loans that states if you have all of your loans originating from a single lender, you must consolidate with that lender). I'm sure this was put in the bill to make some bank lobbyists happy. Anyhow, I fall outside because I have my loans through lenders X & Y. Now, if I choose to consolidate with X (making my Y loans disappear) AND I take out loans with lender X for my final two years, I will then fall back under the "single-lender rule". Of course, this constrains my ability to shop around for best rates and bene's later (when we might possibly have the ability to consolidate ALL of our loans together). So, the soln to this is consolidate with whoever now and then be sure to take at least one loan out by another lender (doesn't matter how you do it, just make sure you have >1 lender at the end of you degree). Hope this helps.

 

[ItsGavinC]

Hey all, I'm not great with this stuff and hoping somebody can answer a really stupid question for me.

I'm on the verge of doing in-school consolidation with Direct Loans, but I'm really key on maintaining my 6-month grace period. DL offers this if I meet three of their criteria, the first one being that I have a Direct Loan or attend a Direct Loan school.

Can somebody explain to me what the heck a Direct Loan is? All of my graduate loans (Perkins, Stafford sub and unsub, and private loans) have been run through Sallie Mae and the Access Group, so I'm assuming my loans are NOT Direct Loans. Is that correct?

If that is correct, then I'm skipping on the DL consolidation, since I was only really interested in using them to maintain my 6-month grace period after graduation.

 

[Dr. J?]

Hey all, I'm not great with this stuff and hoping somebody can answer a really stupid question for me.

I'm on the verge of doing in-school consolidation with Direct Loans, but I'm really key on maintaining my 6-month grace period. DL offers this if I meet three of their criteria, the first one being that I have a Direct Loan or attend a Direct Loan school.

Can somebody explain to me what the heck a Direct Loan is? All of my graduate loans (Perkins, Stafford sub and unsub, and private loans) have been run through Sallie Mae and the Access Group, so I'm assuming my loans are NOT Direct Loans. Is that correct?

If that is correct, then I'm skipping on the DL consolidation, since I was only really interested in using them to maintain my 6-month grace period after graduation.

Yes, it sounds like if all of your loans originated from Sallie Mae or the Access Group, then you would not have Direct Loans.

If you want to maintain your six-month grace period, I would roll with Graduate Leverage and Ed Financial. They have negotiated terms such that we keep our 6-mos grace period. I haven't heard that from any other lenders. I think the biggest reason why I'm going with GL is because of the contract that I will sign with the lender which states that they will not sell my loan and none of the bene's will change (30 yrs is a helluva long time).

 

[ItsGavinC]

Yes, it sounds like if all of your loans originated from Sallie Mae or the Access Group, then you would not have Direct Loans.

If you want to maintain your six-month grace period, I would roll with Graduate Leverage and Ed Financial. They have negotiated terms such that we keep our 6-mos grace period. I haven't heard that from any other lenders. I think the biggest reason why I'm going with GL is because of the contract that I will sign with the lender which states that they will not sell my loan and none of the bene's will change (30 yrs is a helluva long time).

Alrighty. I'm split between GL, UHEAA, and Sallie Mae, so this info helps out.

Do the qualifications for obtaining a economic hardship deferment change from lender to lender or are they set at the federal level?

 

[Etomidate]

Alrighty. I'm split between GL, UHEAA, and Sallie Mae, so this info helps out.

Do the qualifications for obtaining a economic hardship deferment change from lender to lender or are they set at the federal level?

Deferment rules are controlled under Federal guidelines.

Therefore, the company you choose to consolidate with has no effect on your eligility for deferment.

 

[snowman8]

Can any one convice me that I should use GL/AES over T.H.E to consolidate my loans (besides that GL/AES offers a 1.25% rate reduction which starts after 20 months over T.H.E. .75% which starts right away)? How stable is GL/AES and how can I be sure that their benfits are guaranteed over 30 years? It seems from other posts that one can not be 100% sure that they will get the bonus that these companies advertise?

 

[Blade28]

Since all my Staffords are with Sallie Mae, and because they offer pretty good benefits, I'm consolidating with them. 0.25% discount for registering online, 1% discount after a certain number of consecutive months without a late payment.

I also threw in my $12.5k of Perkins loans.

 

[X.O.]

What are you guys doing about your private loans? I heard that GL has private loan consolidation options but havent investigated further yet.

 

[kas23]

What are you guys doing about your private loans? I heard that GL has private loan consolidation options but havent investigated further yet.

I don't know what GL has to offer in this arena. Nevertheless, I will not be consolidation them and will be acting like an indentured servant for the next few years feverishly trying to pay them off.

 

[Dr. J?]

I don't know what GL has to offer in this arena. Nevertheless, I will not be consolidation them and will be acting like an indentured servant for the next few years feverishly trying to pay them off.

Unwise move, dude (the part about slaving away to pay your loans off ASAP). You're better off investing that money in the S&P 500 (8-10% rate of return, historically), rather than paying off your loans (which will be at approx. 3 %), as soon as you can. For this same reason, this is why it is important to have our consolidation loans amortized to the full 30 yrs. Paying it off any sooner and you're losing money on the deal (this is assuming you're using the extra money you would pay per month to invest in your 401k). We're already behind the eight-ball for investing in our retirement (since we are starting in our late 20's - early 30's). Your best bet is to consolidate and then make sure your 401k is fully-funded from Day 1 of your residency. Compounding interest is truly the 8th wonder of the world.

 

[Dr. J?]

About consolidating private educational loans...I don't think there is another method of doing this, besides using another unsecured bank loan that gives you a better rate. If you own a house with equity, you might look into a line of credit. I don't know what the interest rates are on these loans nowadays. Of course, there are a lot of financial guys/gals out there who disagree with placing your primary residence at risk in order to restructure your debt. May be a bit of a risky move until your in a more secure job than residency or fellowship.

 

[hans19]

Just wanted to see who people consolidated their loans with... and what their APR and other benefits they received...

I consolidated with the Devil... Man you can't beat the interest rate!

Wait a min--- AW CRAP !!!!