For Those With Student Loans...Possibly Breaking News!

[iudentist04]

We were also told today about what is called a hardship deferment. The way i understand it is if after you graduate, if you are not in a financial situation that allows you to start making payments you can apply to have them deferred. This could be used in place of your 6 month grace period if you lose it by consolidating.

Let me know if anyone knows anything else about this. This is just the way our financial aid guy made it sound.

Also what would be the advantage of direct laons over sallie may or the other way around? Is there a real difference in borrower benefits?

Thanks

---

Members don't see this ad.

 

[3rdMolarRoller]

Stupid sallie mae is slower than hell. I applied for thier application on May 30th and they still haven't sent me anything. I called them up and they said I never asked for the application and I need to request it through their website but when I request it again it says I can't because I already have and I should get it in 2-3 days. Well its been triple that time and nothing yet and they can't help me over the phone either. Big time frustration!

 

[gumgardener2009]

Right, but interest rates have an absolute floor of 0% (obviously), which means that at the 1.6% or so we'll currently pay if we take advantage of a couple easy discounts, rates are pretty close to rock bottom, which in turn means that whether one considers the loans cheap or not, it's not possible for them to get much cheaper.

0% is NOT the absolute floor. This all depends upon prevailing economics. Theoretically someone could earn a negative interest rate, but if the rate of deflation is more negative then the value of their money is actually growing. In the 90's in Japan rates were close to 0% but they had deflation. Why did the Japanese continue to put their money in banks in Japan when they could get a higher rate in other countries? It's because the value of their yen was increasing in relation to prices of goods. On the flipside, someone could be earning a positive rate but their money is losing value if the inflation rate is greater than the interest rate vehicle they've invested in (an everyday occurence). The first investor has a positive real interest rate while the second investor has a negative real interest rate. Could nominal rates go negative? It's unlikely but possible. Most people would bury their money in their backyards if rates were negative, but Bill Gates doesn't have a big enough backyard. For security and ease of transactions he may still keep money in the bank in such a situation. Of course he has sophisticated money managers and they would be finding other places to stash money and hedge it, but not all of us can do that.

 

[ItsGavinC]

We were also told today about what is called a hardship deferment. The way i understand it is if after you graduate, if you are not in a financial situation that allows you to start making payments you can apply to have them deferred. This could be used in place of your 6 month grace period if you lose it by consolidating.

Let me know if anyone knows anything else about this. This is just the way our financial aid guy made it sound.

Also what would be the advantage of direct laons over sallie may or the other way around? Is there a real difference in borrower benefits?

Thanks

This is true about deferment. You can research the qualifications on any of the consolidation websites.

 

[DcS]

if I consolidate both subsidized and unsubsidized loans together, will the
government still pay the interest on the subsidized portion? Also, I have
health profession loans but I think they are
fixed at 5%, so I shouldn't consolidate those right? b/c won't that make the
rate for the others go up?

You are right..DO NOT consolidate Health Science or Perkin's loans because their 5% rate will hike up your overall rate. Keep them as separate entities.

 

[DcS]

We were also told today about what is called a hardship deferment. The way i understand it is if after you graduate, if you are not in a financial situation that allows you to start making payments you can apply to have them deferred. This could be used in place of your 6 month grace period if you lose it by consolidating.

Let me know if anyone knows anything else about this. This is just the way our financial aid guy made it sound.


Thanks

I am aware of this...it's called economic hardship. It's a sliding scale based on the amount of debt you have and the salary you are making.

Assume you are in a residency/job with a 40K stipend. To claim economic hardship while making 34 grand you have to have more than 60K in student debt. To claim economic hardship if you make 40g stipend you must have over 110k in student debt. In our example, say you have a 40K stipend but only have 80K in debt. You would NOT qualify for economic hardship. However, what you would need to do is say put 4K into an IRA to max it out and say another 4K into a 401k. That brings your taxable income down to 32K and qualifies you for economic hardship.

Keep in mind that by doing so you may lose any borrower benefits, like % reductions for consecutive payments because even though you are deferring they may consider it a "missed payment". Check w/ your specifiic lender.

Our lender has great borrower's benefits. Automatic debit from bank, .25% reduction. 24mos straight payments another 1%, at 36 mos an additional .5%, and at 48 months another .5%...so basically w/ 4 straight years of payments my interest rate will be 0.53%. Pretty ridiculous stuff.

Make sense?

 

[iudentist04]

Our lender has great borrower's benefits. Automatic debit from bank, .25% reduction. 24mos straight payments another 1%, at 36 mos an additional .5%, and at 48 months another .5%...so basically w/ 4 straight years of payments my interest rate will be 0.53%. Pretty ridiculous stuff.

Who is your lender?

 

[DcS]

College Foundation, only in NC, state backed.

 

[adamlc18]

College Foundation, only in NC, state backed.

DcS,

I have a question for you. I have heard that if we consolidate we will start accruing the interest on subsidized staffords and I have also heard that consolidated loans will still be subsidized. For going through CFI, which is it?

 

[DcS]

Unfortunately, the subsidized will basically turn into unsubsized, with interest to start rolling as of now. Over the long run if you have a pretty decent amout of loans it's still worth it.

 

[gumgardener2009]

Unfortunately, the subsidized will basically turn into unsubsized, with interest to start rolling as of now. Over the long run if you have a pretty decent amout of loans it's still worth it.

This is from an email between me and one of the principals at GL:

No, once you consolidate in school you will go back into in-school
deferment. As such, your Stafford subsidized loans will continue to
maintain their subsidy. Anytime you are in a deferment you maintain your
Stafford subsidies.

 

[aphistis]

This is from an email between me and one of the principals at GL:

No, once you consolidate in school you will go back into in-school
deferment. As such, your Stafford subsidized loans will continue to
maintain their subsidy. Anytime you are in a deferment you maintain your
Stafford subsidies.

That jives with what our financial aid guy & Sallie Mae's website both say.

 

[ItsGavinC]

For those interested in other options, UHEAA is a pretty good deal. The only downside is that you must have at least one loan that is serviced by them.

Their benefits are 1.25% reducation for automatic debit sign-up, and another 1% reducation after 48 on-time payments. You are allowed to miss 2 payments (no more than 30 days late) in that 48-month time period and still receive the 1% rate benefit. After receiving the 1% benefit, you do not lose the benefit if you have a late payment.

http://www.uheaa.org/ is the website for those interested.

 

[DcS]

This is from an email between me and one of the principals at GL:

No, once you consolidate in school you will go back into in-school
deferment. As such, your Stafford subsidized loans will continue to
maintain their subsidy. Anytime you are in a deferment you maintain your
Stafford subsidies.

I was referring to adam's question. With OUR specific lender (CFI) they lose subsidy.

 

[saraman]

I agree

 

[Col Sanders]

For those interested in other options, UHEAA is a pretty good deal. The only downside is that you must have at least one loan that is serviced by them. .

You can also qualify with UHEAA if you have loans held by more than one lender. For example you have loans through your undergraduate institution(it can be any school) and then also through your dental school(again it can be any school). The only thing that UHEAA requires is that you contact both of those lenders and submit forms to go into immediate repayment. At that point you can consolidate with UHEAA and take advantage of its awesome benefits
1.25% reduction for direct withdrawal
1% reduction after 48 months ontime or
1% reduction after 24 months ontime double payments
3% origination refund. FFELP wont refund the origination 3%, Direct Loans consolidations refund 1.5%
2 year no questions asked deferral.

The one disadvantage to UHEAA is the loss of 6 months grace period, however, UHEAA suggested consolidating with Direct Loans first because they are the only ones that retain the 6 months grace period, and then after the grace period is over consolidate with them to take advantage of their great repayment benefits. Assuming you are doing an in school consolidation and are still taking out more loans to consolidate later with.

 

[a2thdr]

Sallie Mae is a private lender. It has nothing to do with federal loans.

sallie mae said no to me today also!
is this true?

 

[DcS]

Sallie Mae is a private lender. It has nothing to do with federal loans.

Are you serious? Sallie Mae provides federally guaranteed student loans originated under the Federal Family Education Loan Program. There are tons of private lenders that dispers Federal stafford loans.

 

[ItsGavinC]

The one disadvantage to UHEAA is the loss of 6 months grace period, however, UHEAA suggested consolidating with Direct Loans first because they are the only ones that retain the 6 months grace period,

True, however one of the primary qualifications for consolidating with Direct Loans is that you must have at least one prior Direct Loan.

That didn't pan out for me because I only have FFEL federal loans and have never attended a school that participated in the Direct Loan program.

 

[Col Sanders]

True, however one of the primary qualifications for consolidating with Direct Loans is that you must have at least one prior Direct Loan.

That didn't pan out for me because I only have FFEL federal loans and have never attended a school that participated in the Direct Loan program.

I was just stating that the you can retain your grace period by consolidating with direct loans(for those from direct loan schools) and later consolidate with UHEAA to take advantage of their benefits and have the best of both worlds. I wasnt suggesting that you specifically should do this, I wanted others to see the information and know they have options.

 

[reena]

Stupid sallie mae is slower than hell. I applied for thier application on May 30th and they still haven't sent me anything. I called them up and they said I never asked for the application and I need to request it through their website but when I request it again it says I can't because I already have and I should get it in 2-3 days. Well its been triple that time and nothing yet and they can't help me over the phone either. Big time frustration!

brocnizer,
i encountered the same problem with sallie mae. during the second phone call, the rep mentioned that i can actually have the consolidation app completed online (with an electronic signature). go to:
http://www.salliemae.com/apply/borrowing/smartloan.html
then to "apply online" and folow the links. you should already have a user id and password (during your initial request). i was able to complete the app in less than 10 minutes. unfortunately, though the app was completed 2 weeks ago, there is no record of it being processed when the status was checked on their website.

 

[ItsGavinC]

You can also qualify with UHEAA if you have loans held by more than one lender.

According to UHEAA, this is untrue. The first stipulation of in-school consolidation is that you "must have at least one loan held or serviced by UHEAA".

I'm sure the more than one lender concept that you stated is effective for out of school consolidation, though.

Students who have loans held by a single lender fall under the ominous "single lender rule," which states that the lender must give the student permission to consolidate under a different lender.

 

[Col Sanders]

According to UHEAA, this is untrue. The first stipulation of in-school consolidation is that you "must have at least one loan held or serviced by UHEAA".

I'm sure the more than one lender concept that you stated is effective for out of school consolidation, though.

According to UHEAA, this is true just as I stated earlier.

If you would have read my post more carefully you would have noticed that I said for this to work you have to submit forms to both your lenders requesting immediate repayment(meaning you are going to begin paying on your loans). Once in repayment UHEAA immediately handles it just like an out of school consolidation whether your still in school or not, and yes it works, I have some friends that have already consolidated this way with UHEAA. So practically those in school can consolidate this way but technically its not considered an in school consolidation but an out of school consolidation.

 

[ItsGavinC]

According to UHEAA, this is true just as I stated earlier.

If you would have read my post more carefully you would have noticed that I said for this to work you have to submit forms to both your lenders requesting immediate repayment(meaning you are going to begin paying on your loans). Once in repayment UHEAA immediately handles it just like an out of school consolidation whether your still in school or not, and yes it works, I have some friends that have already consolidated this way with UHEAA. So practically those in school can consolidate this way but technically its not considered an in school consolidation but an out of school consolidation.

Gotcha.

 

[ToothMonkey]

I just contacted Graduate Leverage to determine my eligibility for in-school consolidation and one of the statements in their response caught my attention:

Does this mean Graduate Leverage is no longer able to retain the grace period for students? They never mentioned anything about that particular benefit in the message.

I received the exact same message from them, and take it to mean that they no longer grant the grace period.

In case anyone is still reading this thread and wondering about this issue...I spoke with GL on the phone yesterday and they said they can still maintain the grace period thanks to a deal they have with U.S. Bank/GCO (as mentioned in the letter they sent to ASDA members).

Unfortunately those borrowers with only a single lender do not have the opportunity to use GL's lender of choice, so unless you qualify for Direct Loan Consolidation through the government your grace period will have to be waived.

 

[kato999]

In case anyone is still reading this thread and wondering about this issue...I spoke with GL on the phone yesterday and they said they can still maintain the grace period thanks to a deal they have with U.S. Bank/GCO (as mentioned in the letter they sent to ASDA members).

Unfortunately those borrowers with only a single lender do not have the opportunity to use GL's lender of choice, so unless you qualify for Direct Loan Consolidation through the government your grace period will have to be waived.

That's what they told me too. Since my loans were only through one company, I can only consolidate my loans through Sallie Mae. I am locked in at 2.7% which still isn't half bad though.

Another question I forgot to ask was if you pursue a residency after graduation will your loans remain in deferment. Does anyone know?

 

[ToothMonkey]

if you pursue a residency after graduation will your loans remain in deferment.

The ADEA has some good info on deferment for dental residents. The short answer, which can be found on the last page of the PDF file below, is that if your residency is affiliated with an "institute of higher education" then you can apply for in-school deferment. Otherwise you will have to apply for an economic hardship deferment.

Deferment Fact Sheet

 

[ItsGavinC]

That's what they told me too.

I just spoke to William from GL this morning, and was told that they could no longer offer to maintain the 6-month grace period.

 

[kato999]

The ADEA has some good info on deferment for dental residents. The short answer, which can be found on the last page of the PDF file below, is that if your residency is affiliated with an "institute of higher education" then you can apply for in-school deferment. Otherwise you will have to apply for an economic hardship deferment.

Deferment Fact Sheet

Thanks for the info. I would think applying for economic hardship would kill your credit. I guess I would probably need to take out more loans to cover the payments the stipend wasn't enough.

 

[ToothMonkey]

I would think applying for economic hardship would kill your credit.

I'm not 100% sure but I don't believe any type of deferment or forbearance will damage your credit rating.

 

[ToothMonkey]

I just spoke to William from GL this morning, and was told that they could no longer offer to maintain the 6-month grace period.

Not even for students with multiple lenders? What the heck happened to the sweet deal they told ASDA members that they supposedly had with US Bank (as I recall it even included better benefits like 1% off after only 20 months)? Honestly, all this confusion surrounding GL and the terms of their supposedly iron-clad contract doesn't exactly inspire confidence.

 

[Zurik5]

I'm not 100% sure but I don't believe any type of deferment or forbearance will damage your credit rating.

It doesn't.