Student Loan Consolidation - Need some insight :)

[stilez]

Afternoon All,





Having graduated almost a year ago, my loans have just started kicking into action and I have been getting consolidation notices from companies everywhere claiming everything. Rather than jump in without checking the water-depth, I`d appreciate some insight on going about this whole process. It`d be nice to have one payment at a locked in rate, but finding the right deal is a bit new to me. Right now, I have a Perkins and Stafford loan out, if this helps.





Thanks in advance!

[Johnnie27]

I did the same thing about a year ago. I threw away all those notices that I received in the mail. I had about 3 or 4 different school loans and consolidated them with Sallie Mae who is one of the original lenders. They are very easy to work with, understanding and made it easy to consolidate. The actual process took about 4 months which I had to keep making payments until the consolidation was complete. For whatever reason you`re unable to make payments you can always ask for forbearance or a deferment. Sallie Mae is the biggest lending company when it comes to students loans and I felt safe with them. I didn`t trust those other lenders who will most likely sell my loan to someone else.



My recommendation is Sallie Mae.

[stilez]

Johnnie: Thank you!





Any others :)?

[kompressornsc]

Sallie Mae is getting ready to go private, so there may be some big changes. You never know. They`re one of my clients and I`m not sure how much the takeover is going to change things yet.

[feded]

First, what is your degree in? Perkins loans may be eligible for forgiveness if you are in certain fields, such as medical, education, some areas of law and social work. If you are in any of these fields you need to look into forgiveness before you consolidate or you`ll lose the ability.

I work for a consolidation broker and there are indeed many, many companies out there. Part of my job it to deal with other lenders and I`m not crazy about Sallie Mae. All of the largest lenders have the same problem - revolving customer service people. The majority of the time when I call them I have to tell the rep how to find the information I need. Many times they are not even familiar with the industry terms. It happens in any large company in any industry, the customer service personnel are just not trained enough prior to putting them on the floor. Sallie Mae is just as likely to sell your loan as anyone else, all lenders have the capability but few do. Our lender has never sold a student loan, ever. Not to say they never will, but it`s not as common as say mortgages which are sold fairly regularly.

When picking a consolidation company you want to make sure you know the overall costs. Any lender should be able to tell you what the total interest you will pay over the life of the loan is. Having that figure will make it much easier to compare different repayment incentives. I`m not going to say my company name because I didn`t post this as an ad but our current lender is offering .5% interest rate reduction for an automatic payment from a checking or savings account and 1% reduction after 24 months of ontime payments, which is just about the best in the business currently. Use that as a starting point and see if you can find better. I have seen a few that are offering 1.25% reduction after 48 months, you would have to get a total savings quote to tell if it is a better deal or not. Be careful of offers for cash back up front, they almost always cost you more in the long run by having lesser interest rate reductions. Ask if your repayment incentives are permanent or not, with some companies if you miss a payment you lose your incentive and can`t get it back. Some companies make them permanent once you qualify for them. With our comapny you lose it if you miss a payment but you can earn it back again.

My personal opinion as someone who deals with these lenders regularly is stay away from Sallie Mae, EdFinancial, Nelnet and Wells Fargo. I often have to advocate for our clients and these companies have not shown me they are student oriented. YMMV. I`m happy to answer any further questions, one of the other parts of my job is writing educational articles on how the industry works.

[feded]

First, what is your degree in? Perkins loans may be eligible for forgiveness if you are in certain fields, such as medical, education, some areas of law and social work. If you are in any of these fields you need to look into forgiveness before you consolidate or you`ll lose the ability.

I work for a consolidation broker and there are indeed many, many companies out there. Part of my job it to deal with other lenders and I`m not crazy about Sallie Mae. All of the largest lenders have the same problem - revolving customer service people. The majority of the time when I call them I have to tell the rep how to find the information I need. Many times they are not even familiar with the industry terms. It happens in any large company in any industry, the customer service personnel are just not trained enough prior to putting them on the floor. Sallie Mae is just as likely to sell your loan as anyone else, all lenders have the capability but few do. Our lender has never sold a student loan, ever. Not to say they never will, but it`s not as common as say mortgages which are sold fairly regularly.

When picking a consolidation company you want to make sure you know the overall costs. Any lender should be able to tell you what the total interest you will pay over the life of the loan is. Having that figure will make it much easier to compare different repayment incentives. I`m not going to say my company name because I didn`t post this as an ad but our current lender is offering .5% interest rate reduction for an automatic payment from a checking or savings account and 1% reduction after 24 months of ontime payments, which is just about the best in the business currently. Use that as a starting point and see if you can find better. I have seen a few that are offering 1.25% reduction after 48 months, you would have to get a total savings quote to tell if it is a better deal or not. Be careful of offers for cash back up front, they almost always cost you more in the long run by having lesser interest rate reductions. Ask if your repayment incentives are permanent or not, with some companies if you miss a payment you lose your incentive and can`t get it back. Some companies make them permanent once you qualify for them. With our comapny you lose it if you miss a payment but you can earn it back again.

My personal opinion as someone who deals with these lenders regularly is stay away from Sallie Mae, EdFinancial, Nelnet and Wells Fargo. I often have to advocate for our clients and these companies have not shown me they are student oriented. YMMV. I`m happy to answer any further questions, one of the other parts of my job is writing educational articles on how the industry works.

[Paulie Walnuts]

I did the same thing about a year ago. I threw away all those notices that I received in the mail. I had about 3 or 4 different school loans and consolidated them with Sallie Mae who is one of the original lenders. They are very easy to work with, understanding and made it easy to consolidate. The actual process took about 4 months which I had to keep making payments until the consolidation was complete. For whatever reason you`re unable to make payments you can always ask for forbearance or a deferment. Sallie Mae is the biggest lending company when it comes to students loans and I felt safe with them. I didn`t trust those other lenders who will most likely sell my loan to someone else.

My recommendation is Sallie Mae.I hate to break it to you but almost every student loan gets sold in its lifetime, including Sallie Mae loans. Its seamless to you so it really does not even need to be a consideration.

[Johnnie27]

I understand that my loan can be sold at any time but I`ve dealt with Sallie Mae for a few years now and I`ve never had a problem. They even have their own collections department.

[feded]

All lenders have a collections department :)

It`s true they can be sold but none of the lenders we have worked with ever sell their loans, just for example. In the past when the single lender rule was in place some companies would try to buy up a student`s loans that were with other lenders. The previous law stated that if you only had one lender you could only consolidate with that lender, so say you have 1 loan with Direct (DOE), 1 with Sallie Mae, and 1 with Nelnet. If Sallie Mae or Nelnet could get the other companies to sell your loan to them giving you single lender status you would have no choice but to consolidate with them thus elinminating your right to shop for a better rate. That law was created by Sallie Mae by the way, their lobbyists had it pushed through as a rider a few years ago. Just one of the reasons I think they`re evil. This law was repealed last July 1st cutting down on a lot of the loan sales.

In rare instances the sale of your loan will void your repayment incentives, that`s another thing to ask about. It doesn`t happen often but if it happens to you it`s one time too many.

[Paulie Walnuts]

Sallie Mae has bought and sold my loan 4 times since 2000. Funny how they sell then buy back. What would be the advantage of this?

[feded]

Sallie Mae is a blanket corporation covering over 150 lenders, it`s possible some of those sales were just transfers to different divisions under the same umbrella in some kind of asset shuffling. Most of their holdings are smaller companies they bought and they still operate under their original names. Here`s a list of names that are owned by Sallie Mae SLM Corporation (Sallie Mae) trademarks and service marks (http://www2.salliemae.com/about/copyright.html).

I asked my boss too and he couldn`t think of any financial advantage to them doing this either, other than if your repayment incentives were negated by the sale and they did it just to take them away. Even Sallie Mae isn`t that evil though.

[velobard]

I consolidated a couple of years ago and they sent a check to to my lender that wasn`t sufficient to consolidate the entire loan. I`ve gone rounds a few different times and every time each party wants to blame the other: the original lender vs the original consolidator vs Sallie Mae. I`ve pretty much given up on them getting it sorted out, they seem to have no incentive to help out on this.



When I was still in school Sallie Mae was a headache every semester until I switched to a different lender. Due to a previous experience with identity theft way back before it was cool, I did not use my SSN as my student number. Because of this, every single semester they didn`t want to acknowledge that I qualified for an in-school deferment. I was a little disgusted to wind up back with SM once again. I didn`t realize that my consolidator was one of their related companies.

[Paulie Walnuts]

Sallie Mae is a blanket corporation covering over 150 lenders, it`s possible some of those sales were just transfers to different divisions under the same umbrella in some kind of asset shuffling. Most of their holdings are smaller companies they bought and they still operate under their original names. Here`s a list of names that are owned by Sallie Mae SLM Corporation (Sallie Mae) trademarks and service marks (http://www2.salliemae.com/about/copyright.html).

I asked my boss too and he couldn`t think of any financial advantage to them doing this either, other than if your repayment incentives were negated by the sale and they did it just to take them away. Even Sallie Mae isn`t that evil though.

Ahhh I did not know that aboot Sallie Mae, as a blanket corp, thanks for that!

[zippymbr]

Check out Clark Howards web site. He has a good rundown on who is a good company to go with and what to stay away from.

[feded]

This was just posted on Reuters



WASHINGTON (Reuters) - The chairman of the U.S. Senate`s education committee said on Thursday he has written to the heads of two major student lenders over concerns about loan collection tactics, opening a new line of inquiry in a fast-expanding scandal in the student loan business.



"I am concerned that several private lenders may be engaging in harsh and inappropriate tactics with regard to borrowers whose payments are overdue ... tactics that are prohibited by federal law and regulations," Sen. Edward Kennedy wrote to Tim Fitzpatrick, chief executive of Sallie Mae.



Senate investigators have obtained information indicating lenders may have told a borrower`s spouse that the borrower would go to jail if he did not pay, which is "a blatantly false assertion," said Kennedy, a Massachusetts Democrat.



Lenders may also have refused to negotiate with borrowers on payment deferment, called borrowers on the job after being told to stop, and harassed borrowers` neighbors, family and co-workers.





Kennedy asked Fitzpatrick to provide information about the company`s collection practices under the federally guaranteed student loan system.



Formally known as SLM Corp., Sallie Mae is the nation`s largest student loan group and has been a focus of an inquiry involving allegations of misconduct and conflicts of interest that are spreading across the $85-billion industry.



Kennedy also wrote of his concerns to Michael Dunlap, chief executive of Nelnet Inc., another student loan group.