Student Loan Consolidation Question [Archive] - Front Office Football Central

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10-02-2007, 01:05 AM

Mrs. A has some student loans that have payments starting in December.

Is there any reason that I should wait to consolidate them? Are interest rates supposed to be going down? And if I do wait, I have to wait until next July before it makes any difference, right?

I am by no means an expert on the subject, but I am also in the process of consolidating my loans and have been fighting through this for about a month now.

If she has private student loans, there is really no benefit to consolidating, at least not that I could find, other than reducing payments and extending the term of the loan (and thereby drastically increasing your overall interest costs in the long run).

If she has PLUS loans or Graduate PLUS loans, or Federal Stafford loans that were disbursed starting in Fall '06, then those loans are fixed as well, and consolidating probably doesn't benefit much (except, again, for decreasing monthly payments by extending the term of the loan).

If, however, she has Federal Stafford loans that were disbursed PRIOR to fall '06, and have not been previously consolidated, those loans are currently variable, and the next change will be in June '08, so you are correct that there is no rush to get these done immediately, especially if you think rates will come down next year.

Finally, some bad news. New federal legislation went into effect yesteray (Oct. 1) that limits what "Third Party Consolidation Companies" (for lack of a better term) can offer you -- previously, they could offer you benefits such as rate decreases for paying with automatic monthly checking withdrawals, rate decreases for xx number of timely payments, etc. However, these benefits can no longer be offered (I'm not sure if the big companies, such as AES and Sallie Mae, can still offer these benefits, as AES has been giving me the run around and double talk for a week now).

Hope that was at least marginally helpful...