Student Loan Consolidation
Posted on February 20, 2005 14 Comments
I recently consolidated my student loans through the Department of Education online and, since the process went smoothly, encourage you to do the same. Given that the average American student graduates with $18,900 in loans (Nellie Mae, 2003), I thought some of you might benefit from consolidation.
I originally requested information about loan consolidation last year via phone and in return received a gaggle of forms that I could not fill out by myself (I didn’t have all the information required in my possession). I let the paperwork fester around my apartment for a year before attempting the online route (due to increasing federal interest rates), which I found to me much more manageable.
To complete the online paperwork, you’ll need a PIN number. You can request one here:
http://www.pin.ed.gov/PINWebApp/pinindex.jsp
Your PIN will give you access to all your loan repayment records, which you’ll need to complete the consolidation forms. If you already have a PIN but don’t regularly use it, you may be asked to confirm your information.
Once you have your PIN, go here and begin the application process:
http://www.loanconsolidation.ed.gov/borrower/borrower.shtml
Be sure to follow the directions, read the FAQ and understand all system requirements. I wouldn’t recommend completing your consolidation forms on a public computer (sorry) because you have to send a lot of personal data.
The most convenient part of the experience was logging on to the student loan Web site, checking real-time data on every single loan I owe – twelve, to be exact – and then just pasting the numbers onto the consolidation screen. The whole process probably took 45 minutes.
Last week I received confirmation in the mail that my loans have been consolidated with an interest rate of 3.5 percent – not bad! I’ve locked in that rate for the life of the loan, no matter what happens with federal interest rates come July.
If you have the time, loans and a personal computer, I highly recommend consolidation. One final tip, never consolidate with a third-party company, no matter how many mailings they send you. And don’t be fooled by companies with names like “Federal Consolidation.” The government can give you the cheapest interest rates available – NOBODY can go lower – so why even mess with those companies?
Now that I’ve settled the matter of loan consolidation, I’m moving onto credit cards. I never did complete my New Year’s resolution to obtain a joint AmEx or Discover Card with my boyfriend to pay bills and I am acutely aware that my Citibank Card still holds a 14.5 percent interest rate because I paid late twice in the past two years.
Until next time, friends….
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14 Responses to “Student Loan Consolidation”
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May 31st, 2006 @ 9:55 pm
How to save on student loans: US News reports on a LEGAL QUIRK (with June 30 deadline!!)
My colleague here at USNews.com reports this week on how to cut student loan interest rates through a legal quirk: “College students and graduates-and their parents-have until June 30 to save themselves thousands of dollars on their outstanding educational loans.”
“Those who already have federal educational loans can take advantage of a legal quirk that allows debtors to lock in last year’s low interest rates before they jump by almost 2 percentage points on July 1.”
Link to this full U.S. News & World Report article: http://www.usnews.com/usnews/biztech/articles/060530/30studentloan.htm
Article includes charts on just how much one can save on a student loan of $20K, and on a parent loan of $10K. http://www.usnews.com/usnews/biztech/articles/060530/30rates_chart.htm
Also a sidebar on who should just sit tight rather than consolidate. http://www.usnews.com/usnews/biztech/articles/060530/30noloan.htm
October 3rd, 2006 @ 7:36 pm
Great blog! Very helpful and interesting. I wanted to let you know that my husband and I just started a website, http://www.EducationRegistry.com where you can create a gift registry, asking for contributions towards student loan debt or educational savings accounts. Hope this can help some people. Keep up the good work!
August 1st, 2007 @ 4:00 am
Great blog your writings open my horizon, thanks
April 14th, 2008 @ 12:19 pm
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June 2nd, 2008 @ 9:45 am
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June 2nd, 2008 @ 9:56 am
Anonymous said…
I read this article its very usefull to me and I want to share with my document
————————
cameroon
Don’t be a victim. Stop credit card debt now. We can help.
http://www.stop-credit-card-debt.com
July 19th, 2008 @ 3:43 pm
This article is really good and helpful to everyone because it’s provide good information and useful tips of financial management.
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May 7th, 2009 @ 10:32 am
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July 30th, 2009 @ 4:28 am
Student loan consolidation is a program offered to borrowers in order that they can pay a debt at a discounted amount. Lenders will normally purchase and close such debts at a low interest rate and will offer a longer period than the standard ten-year payment period. The longer period offered by these lenders will normally give the borrower a chance to save for other debts. The extended period of time will also make it easier for the borrower.
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January 23rd, 2010 @ 11:15 am
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