first

woo hoo

If I can get all my loans at rates below 5%, I plan on taking 30+ years to pay them off. Unfortunately, I have some private loans that are at 7% now, but I have very good credit (750+). What are the odds that I'll be able to somehow move to a lower rate?

my boys got mad flava.

"Slow news day, huh?"

I used to work for sallie mae back in the day. Prime rate is a flat rate that is determined through some arbitrary formula. When you get a private loan, you total interest rate is a function of that prime rate + a variable rate, which is determined by your credit. Thus, usually your prime rate will be like 8.25% and your variable rate will be somewhere between -2-12% depending on how you've done in terms of building a strong credit score.

The best part of working at SLM was of course seeing the batshit crazy loans people took out. Namely, one guy has 110,000 dollars in loans for University of Phoenix for 2 degrees. Or, the lady who took out 100k plus in loans at 19% interest to pay for the carribean university of the americas.

OK. So I have a loan with Citibank. Bernanke cut rates by .75% last quarter. Citibank adjust rates quarterly. In January, however, my rates remained at 8%.

Does anyone who is not an idiot (i.e. me) know how student loan interest rates are related to the federal funds relate that Bernanke can tinker with?

I consolidated too soon and now am stuck making up the difference through bribes. Shiiiiiiit.

If Duke is still offering student loans from the Total Higher Education loan group/lender (a.k.a. "T.H.E." or "THE"), then I recommend using them. Some of their numbers might not look the best in a comparison chart on the front end (but I believe that they are pretty competitive), but, once you get to repayment, they have great programs. Every time that you pay on time, a portion of your payment (and it is not an insignificant portion) is matched by the lender to pay down interest, which allows your payment to pay down more principal. Every 7-8 months or so, this match by the lender adds up to enough to equal an entire payment, and you are then considered to be "paid ahead" and an even greater percentage of your payments go to principal. It really allows you to pay down your loans much quicker, and it provides a good hedge against a rough month financially if you can skip a payment because the lender's match caused you to be paid ahead. From the experience of a few friends, CitiBank is the absolute worst to deal with in repayment.

10:46:

If you have good credit score, you should be able to qualify for American Express' offer for 4.99% fixed rate on balance transfers. Do the following:

1. Get a CC that allows you to cash out as balance transfer. Just watch out for the balance transfer fee, if there is one. You should be able to find one that caps it at $75. On a $20k transfer that's a low percentage.

2. Transfer this balance onto the American Express at 4.99% for the life of that balance transfer.

3. Repeat if necessary.

But read carefully for every piece of paper American Express send you. The CC Agreement says they can change the term at any time. However, you don't have to accept the change if you respond in time. They'll then close your account and let you pay off the balance at the original term.

10:46:

If you have good credit score, you should be able to qualify for American Express' offer for 4.99% fixed rate on balance transfers. Do the following:

1. Get a CC that allows you to cash out as balance transfer. Just watch out for the balance transfer fee, if there is one. You should be able to find one that caps it at $75. On a $20k transfer that's a low percentage.

2. Transfer this balance onto the American Express at 4.99% for the life of that balance transfer.

3. Repeat if necessary.

But read carefully for every piece of paper American Express send you. The CC Agreement says they can change the term at any time. However, you don't have to accept the change if you respond in time. They'll then close your account and let you pay off the balance at the original term.

I used Access Group and had nothing but pleasant experiences.

I consolidated during the last downturn (in 2002). There was some benefit, which I am unable to recall, to consolidating before you graduate (or within a short period of time after you graduate). Some of my classmates missed the boat, and it cost them a lot of money. Also, if you get a low enough consolidated rate, stretch the payments over 30 years and payoff private (i.e., variable) loans first.

10:46 - I don't think you can "consolidate" your private loans so you have to look to the traditional finance market, and I don't know if you could do better than 7% for something like that. I would just suck it up and pay them off as quickly as possible....

if you've already consolidated your loans (fed and private, respectively) can you re-consolidate at a lower rate, now that the interst rate is dipping?

I have my privates at 8.4 (can go down to 7.5 after 2 years and auto deduction). My feds are at 4.75.

$160k in debt - debt to $0k!!!!

10:50 re: THE is right on. I used them on a whim when everyone else at my school was using Access. 5 years out and they've been fantastic to work with, super helpful, with great customer service support. As 10:50 noted, the rates may be a little higher on the front end, but they more than make up for it in the matching department. Go THE!

11:00 - I consolidated my private loans with citibank. They offer the option of both fixed or variable. Variable was actually slightlly higher for me (8.6 i believe) so i locked in at 8.4.

Citibank just started their private consolidation - it may be just for citibank loans though...

It would be nice for Congress to eliminate the student loan interest deduction phase out for high income taxpayers.

10:50
The Fed can cut rates, but your loan is based on LIBOR plus. LIBOR right now is about 200 basis points than normal relation to the...
never mind the technicals.
Your rate is not based on what Bernanke does directly. Your rate is based on a rate of London bankers lending banks money. These people think that U.S. banks are still ummm iffy. So rate cuts by Helicopter Ben aren't going to immediately effecting your bottom line if the rest of the world is afraid to lend money to banks with CDOs and credit default swaps comprised of junk junk and garbage.
So your rate would be about 2% lower if Citigroup (and UBS and MS and JPM)wasn't going to write down another 11 digits of value this year.
Eventually, you will see some relief I suppose...but you'll see 2 or 3 firms have major layoffs first.

To all current law students with loan debt:

So you have some public loans and private loans. After shopping all the competitors, I found that Sallie Mae has one of the best consolidation programs for public loans.

I think they all will look at the rates you have for current outstanding public loans, and based on credit score, offer a consolidation rate. Numerous incentives to get a lower rate (online auto-pay through checking account, no late payments for 24-36 months) that add up over time. Several people have told me that they also allow deferment right out of law school pretty easily as well...

Private loans are different, tons of lenders offering consolidation but its just like a private personal line of credit. Most of the rates are not competitive with your current variable rate given the market. Plus, the consolidation requires higher monthly payment and most of the companies offer very limited forgiveness options. I have a few private loans with KHESLC. Not a big fan but haven't found a better deal through consolidation so I've stuck with them.

A debate I have with my wife - is it ever worth it to pay off or pay ahead my Fed loans which are consolidated for 30yrs at 2.6%??? I have about 50K left. My position is that there are so many better places to spend our money now when the SL money is that cheap.

11:12 - definitely NOT worth it. You can keep the 50k in, say, an ING savings account and it will make more interest (4% i believe now) than at 2.6. make the minimum payments, invest the rest or put it in anything that earns more than 4% and youre golden.

11:12 (anon) - you can't be serious? How could it ever be advantageous to pay that off considering you can get that interest rate on a checking account?

JT took his 6.5% rate and ran the hell out of there.

JT still pays 600ish per month in interest. JT is emo.

11:12

Do not pay that loan off. You can do better investing your money and get a higher yield instead of paying off $50k at 2.6%

2.6%...!!! How the hell did you get a rate that low.

LLM students should be eligible for federal GradPlus loans regardless of their financial background...I would get those for the full amount and then use a private provider only as necessary...

I have Citi and Federal loans. At present, the federal loans are at 6.8%. My Citi loans recently dropped to 7%.

How easy is it to consolidate those federal loans at graduation?

And can we get more details on that AmEx 4.99% offer? For example, is there a min. monthly payoff?

How can I find a sugar daddy to pay off my student loans for me and avoid all this talk of consolidation?

Yes, I know, that was an easy one. My wife is lovely person really, she's just a little challenged when it comes to finances. She is one of these people who has a fear of any kind of debt, and thinks there is a "repo man" coming to take our stuff away any day now.

I can't remember exactly when I consolidated - right around late 2003/early 2004 I think. Rate really is killer. If it makes you feel any better my mortgage situation, on the other hand, is not that pretty....

11:16,

I don't understand....he'd keep the 50k in an account...assuming he has that kind of cash, yes?

I have no financial skills whatsoever. Plz keep the mocking to a minimum. <3

American Express offer is here (Read the details!):

https://www201.americanexpress.com/cards/Applyfservlet?csi=38/7011/b/57/0141223177/014093134120/0/n&PID=1&EAID=EhraRx8K%2FBE-%2Fj4kGyu56W3jtz3MITPETQ&CRTV=CCGBLU00000000&PSKU=BLU&BUID=CCG&afflSID=EhraRx8K%2FBE

The min. monthly is 2% of outstanding balance + interest.

Lat,

What would be really helpful is if that LLM who emailed you could send you the Duke chart he/she was referring to, and if you could post it for everyone to see.

"LIBOR" = London inter-bank offered rate, which historically has been analagous (not in % terms, in concept) to the Federal Funds Rate in the US. LIBOR is a more globally used benchmark. (Extra credit: anyone care to venture explaining why?)

P.S. With all this talk about student loans, one wonders, "Where is Loyola 2L ? Will he be enticed out of retirement?"

Can anyone chime in on the status of the College Cost Reduction Act of 2007?

There is a benefit to consolidating before you enter repayment (usually 6 months after graduation) because interest rates are lower during your deferment period. Once you consolidate your Federal loan however, you are locked in at that rate and cannot re-consolidate. Federal student loan rates are adjusted once per year, around July. If you call DirectLoans (the Dept. of Ed's arm for managing student loans) any year around the month of June, they will let you know whether the rate will drop in July. I think their number is 800-848-0979. If you have not consolidated, there is no point in consolidating now because rates will not change until July, and you risk locking yourself in if rates drop in July. Wait until June to see whether the rate will rise. If the rate rises, go ahead and consolidate in June. If the rate is the same or will dip, do not consolidate and wait until the following year to see what the interest rate will do. Moral of the story is, there is no benefit to consolidating your federal loan unless the interest rate will rise in July. This is the advice that I got directly from the Dept. of Ed. and wish I knew years earlier.

My Access Group Private Loans are based on the 3-month LIBOR + 1.7%, calculated quarterly. LIBOR has been dropping dramatically in the past few weeks, with it reaching 4.055% yesterday. If it stayed the same through February 29 (when my next quarter's rate will be determined), that would put my private loans at 5.755% and my federal stafford loans at 6.8% fixed (the rate for loans taken out this year and last year). I think AG has different spreads for different schools though, so at some schools the best credit score still won't get you a rate below LIBOR + 3.5%.

I believe that federal loans rates are adjusted only once a year (in July), so although it will take a while for the Fed cuts to trickle down to any impact on LIBOR, it is likely that further cuts will continue to bring the LIBOR rate down by July. If you look at a chart of LIBOR rates, it has already been falling for the past few months.

11:25, if you are average to above average attractive (read as law school hot) find yourself a 3L going to Wachtell and shack up with him now while he still has time to meet you. If you are actually hot you can hold off till graduation and then snag a PE or HF guy (i.e. former IBanker) on the open market after graduation.

11:10 - Citibank is based on prime (which is related to the fed fund rate, but doesn't move in lockstep); access group and THE are based on LIBOR.

I made a conscious decision when I started LS to have all my private loans pegged to LIBOR. It's mostly been good, though the spike during the credit crunch hurt some. Fortunately, LIBOR has dropped nearly as much as the fed fund rate in the last three months. Haven't received the quarterly interest statement yet from access group to know what the new rate is...

If they'd tell their money-bucks bigwhig buddies not to ship all our work off to India, maybe a bunch of us could actually earn income again and pay our loans!

>I think AG has different spreads for different schools though, so at some schools the best credit score still won't get you a rate below LIBOR + 3.5%.

this is true. f'n sucks to realize you have to pay more for your loans just because you don't go to HYSCCN. at least my school is in the middle, so some people with equal credit (780+) do pay more.

11:38 --

Why did you make a decision to tie your rate to LIBOR instead of prime?

I looked into two private consolidation options -- one with graduate leverage (prime minus .25%) and one with AES (LIBOR plus 2.6%). They are both right around 7 right now. Which would you take?

I'm about to start LS and have been concerned about student loans for a while and had two quick questions for ppl:
1. How much of a financial crunch were your loans in the first few yrs after ls?
2. How long did it take ppl to pay off private loans?

Thanks!

Look into graduateleverage.com - I used them to consolidate both my private and federal loans. Just consolidated my private loans at a variable rate of [prime] - [0.25%] - which comes out to 7% now (and fluctuates with the prime rate, which is tied to the fed rate). Best variable rate I could find and fixed rates tend to be a rip off.

I'm about to start LS and have been concerned about student loans for a while and had two quick questions for ppl:
1. How much of a financial crunch were your loans in the first few yrs after ls?
2. How long did it take ppl to pay off private loans?

Thanks!

why? because when i entered school ('04), rates were still at historical low. while both sets were clearly going to increase in the coming years, i thought LIBOR might fare better. and with the options i was getting for my school, the LIBOR options started out about 10 or 20 basis point lower.

as of today, the LIBOR example is actually 34 basis points better than the prime one (prime = 7.25 according to bloomberg; LIBOR is 4.06). that, of course, can change quickly...

If I understand it correctly, I think the College Cost Reduction Act is going to be quite helpful for law students graduating in the next few years and beyond.

I don't think it goes into effect until 2009, but it has some nice features: an income based repayment option for consolidated federal loans that is generous and reflective of your income only and not the amount of loans (with a debt forgiveness provision for outstanding debt after 25 years) and a public service plan (with debt forgiveness after a cumulative 10 years of public service work, broadly defined).

Nah, it makes sense from a bank's point of view 11:42. If you go to HYSCCN you are much more likely able to pay off your loans on time (if for no other reason than the fact that you can get at least a $145k gig anytime you want regardless of you class rank and city of choice).

i never said it doesn't make economic sense. it just sucks a$$ when you're paying 50 basis points more than some idiot in the bottom at NYU who couldn't dream of landing the the same job i have...

The rates on federal loans is almost guaranteed to drop when adjusted in July. You should consult with your financial aid offices, but if you're a third year law student, I would bet you're better off consolidating federal loans after the rates adjust this summer. If you're a second year law student, I'd recommend waiting until June 2009 to see what happens. It's possible that rates could drop again at that time (especially if there is a recession that lasts into next year). However, if the economy rebounds and the fed raises interest rates, you may be better off consolidating in June, 2009.

Also, the Prime Rate is indirectly influenced by the Fed's adjustment of the federal funds rate. Accordingly, you can expect the Prime Rate to drop as the Fed responds to distress in the US economy. LIBOR is too far removed from the Fed's influence for borrowers to rely on LIBOR falling during a US recession (although it may well do so for reasons other than Fed influence). With Prime Rate loans, there's a little more comfort that the Fed has your back.

I have to admit, I'm completely unfamiliar with consolidation of private loans. It's wasn't in vogue when I graduated in 2003, since the private lenders who offered consolidation apparently required hefty transaction fees - which may have changed. I consolidated my federal loans at 2.8%. Instead of paying those off, I've invested the money - following conventional wisdom.

Access group = fools

I totally agree with the earlier poster (a fellow sufferer, no doubt) that Citibank is the worst deal out there. They have screwed me at every turn.

One important thing for students to look out for: when your lender re-capitalizes your interest. Its important they do not do so until the New Year after you graduate. So if you graduate in May 2008, make sure your lender doesn't recapitalize until January 2009 (or later).

This is important because you can get a tax break for paying off interest on a student loan up to $15K. However, there is an income cap on that deal, so you can only really do it when you are a new 1st Year (start in fall, run to end of year) because once you have a full year under your belt at BigLaw salary, you're over the cap. When you're a newby, you only rack up about $40K of salary for your partial year.

So, when you first start work in Sept/Oct/Nov after graduating, you can tighten your belt, pay your minimums and pay off as much EXTRA as you can specifying that it all go towards the interest that's been building for 3 years - up to a maximum of $15K. BUT (why the capitalization thing is important), if your lender recapitalizes before you pay off $15K of the interest that's built up for 3 years, it all becomes PRINCIPAL again and you don't get credit (tax break-wise) for paying it off.

Citibank screwed us by recapitalizing in November (they claimed they had to by law, which was BS b/c I had friends whose banks did NOT do that), before we could pay off much of the built up interest. Therefore, when we tightened our belt and paid more off in anticipation of the tax break, there WAS NO INTEREST TO PAY OFF ANYMORE. Hence, we ended up getting to take a $1500 tax break instead of a $15,000 break (with no apparent advantage to Citibank, just a disadvantage to us).

As you can tell by this marathon post, some of us are still pretty bitter. Don't let it happen to you (a good start is not choosing Citibank to begin with).

Nah, it makes sense from a bank's point of view 11:42. If you go to HYSCCN you are much more likely able to pay off your loans on time (if for no other reason than the fact that you can get at least a $145k gig anytime you want regardless of you class rank and city of choice).

I took around $20K in loans from Access Group for my 1L year (2005-06). They are charging me interest at 11.25%. This sucks.

I only have one private loan but it's a killer interest rate (12% from sallie mae) - can I refinance or am I stuck bc I have nothing to consolidate?

11:21(2):

My Federal loans were consolidated in 2003 and I am now paying interest at 1.6%. You get that low rate by consolidating at the right time (pure luck, no skill involved) and then meeting certain incentives such as direct debit payment and not missing a payment for 48 months. Meeting each of those milestones knocked a partial percentage point off my interest rate.

As for my private loans, I took them with Citibank and Access Group. The Access Group is paid off. The Citibank was down to about $8k at a rate of 8.0% interest. My Citibank credit card offered me a balance transfer of 0% through June. I bit on the offer with a $75 transfer fee. I am paying the minimum now and, in June, will pay off the entire balance with the bonus I just received. In the meantime, I am earning modest interest at ING on that money.

When I graduated from law school (2005), I used Graduate Leverage. They did the research and made a deal with a consolidation lender (AES). No fees to grad leverage (not sure how they made money, but I don't care). I am locked in at...1.8% for 30 years (for all fed student loans). Was luck to graduate when I did.

Be careful about consolidating your federal student loans. There are many benefits you receive that you may not if you consolidate. Transferring student loans to a CC that includes a universal default clause could be disasterous. The only thing I'd transfer to a CC is other CC debt.

Anyone interested in consolidating should check with graduateleverage.com. The company was started by a few Harvard MBA students as a graduate project. They have negotiated on behalf of students to line up excellent consolidation options. Their customer service reps are also incredibly helpful.

Graduate Leverage=great at getting best terms available, including rate reduction after just 18 payments (rather than 36 per usual)

Private consolidation w/ Citi or SallieMae may not be worth it. Be careful of the rates.

I used graduateleverage.com, too, for both my private and federal loans. they got a 10% private rate reduced to 7.8% on 20k, and lowered the rate onf federal loans to between 1.8 and 5.5 on 4 different loans. they have great customer service as well.

11:58/Duke Alum Part Deux:

I think you're very mistaken. You may want to check in on the yearly cap for the student loan interest deduction. How on earth do you think you could have received a $15,000 deduction? That comment alone should make every single person here doubt anything you write on this topic.

On the issue of transferring private loan balances to credit cards - 12:10 makes a good point about universal default provisions. If you have a Master Card (for example) with a universal default provision, a missed payment on a completely unrelated Visa card (for example) could trigger default interest on your Master Card.

You may also want to check out Bank of America. I put $35,000 of private loans aat 8% onto my BOA Visa Card, at 1.99%. I had to pay it off in 8 months before the rate jumped to 20%, but it turned out to be a good deal. For new grads, I'd recommend waiting a few months before you do this, however. You're going to have some unexpected set up costs when you start work, and you should make sure you'll be able to pay off whatever funds you transfer to the credit card.

Also, I had a good experience on my private loans with Citibank. I'm surprised to hear so many complaints. Then again, I paid them off quickly via the credit card approach described above.

graduateleverage.com. Best rates I could find at the time, and great customer service when working to consolidate - but watch after that - they sell to some other company that sucks in customer service et al.

P.S. I'll save you the trouble. The yearly MAX on the student loan interest deduction is $2,500. Accordingly, please not that you're an ignorant idiot who got worked up over nothing. Based on this comment: "As you can tell by this marathon post, some of us are still pretty bitter. Don't let it happen to you"... it seems as if this wasn't the first time you've gotten worked up over this ... and apparently you are not the only one of your friends who didn't run a google search that would have taken 10 seconds.

got in at 2.87% with all gov't loans, locked. Though I hate the idea of carrying educational debt for 25 years, I just can't justify paying off such cheap money more quickly than that

P.S. I'll save you the trouble. The yearly MAX on the student loan interest deduction is $2,500. Accordingly, please note that you're an ignorant idiot who got worked up over nothing. Based on this comment: "As you can tell by this marathon post, some of us are still pretty bitter. Don't let it happen to you"... it seems as if this wasn't the first time you've gotten worked up over this ... and apparently you are not the only one of your friends who didn't run a google search that would have taken 10 seconds.

I used graduate leverage as well. I'll be graduating and consolidating my private loans (hopefully) after the Fed reduces the rate this summer.

Is there any penalty/problem with consolidating after I graduate?

10:50:

The CitAssit rates adjust quarterly, but only to the prime rate published as of 30 days prior to the first day of the quarter. Check your next statement. You're probably paying a rate as of 1/1 that reflects the .75 point drops in the prime rate in Sept and Oct, but not the additional .25 that the rate dropped in December. You won't get that one until 4/1.

"got in at 2.87% with all gov't loans, locked. Though I hate the idea of carrying educational debt for 25 years, I just can't justify paying off such cheap money more quickly than that."

Ditto. And also, if you let them take it automatically every month, it drops by a quarter of a percent!

Happiness.

My law school provided us with a nice chart showing how the different lenders stacked up in different areas (eg. some take a percentage off the top as your fee). I found that, all things considered, Access group was the best (no fee, lowest rates, etc). I'm sure other law schools can provide similar information.

11:21 - 2.6% is basically what people got after consolidating loans in summer of 2006. Best deal ever. With Access I also get/got a .25% reduction for setting up auto-payment and a soon-to-come .25% for making 48 (or maybe 36) consecutive on-time payments.

Either way, I tried my best to live like a student my first year of BigLaw and was able to save almost the balance of my student loans. The money sits now in a WaMu online savings earning 4.75% (although not too long ago it was slightly higher). Sure, I have to pay taxes on my interest but in the long run I will still come out thousands ahead with this method.

And to pile it on Duke Law Alum Part Deux

From Publication 970:

"Capitalized Interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan."

The thing I hate about Citbank is the way they freaking hound you. If you make a payment on the due date, the 2-3 days it takes for the payment to be reflected flips them out (at least in the last 6 months or so). If you authorize a payment on a Wed. (your due date), expect to get a collections call on Saturday morning from someone telling you that your payment is something like 7 days late. Why 7? Well nothing you do on Saturday will post until Monday or Tuesday at the earliest, so I think they count this even though the time hasn't elapsed.

When I got this call, I told the guy I had authorized a payment. It was only then that he looked it up, confirmed that a payment was pending, and backed off. He did, however, ask me for a reason that my payment was so delinquent for the records. I am taking suggestions for responses should I repeat this reprehensible behavior.

Who takes loans for law school? Middle-class are so stupid! Get a scholarship or have parents pay.

how are the first-tards still posting? Lat you need a few lines of code?

I spent about 10 hours this weekend looking at the Graduate Leverage private loan consolidation option through Richland State Bank. It meant moving from LIBOR + X (for me, about 3.46 weighted average) to PRIME - X (for me, PRIME - .25%). My private loans were through Access Group and T.H.E. (the latter is a much better option, by the way). I ran the numbers, including both the deduction for automatic payments and the T.H.E. Bonus and it meant a difference between an 8.2 blended rate and a 7.0 consolidated rate.

All the research I could find indicated that (a) the rate between LIBOR and PRIME is growing over time (so in the very long run, LIBOR + X could be better than PRIME - X) but that the gap has largely been stable for about 15 years.

You have to figure out the predicted spread between the two and then your own personal spread and determine which will likely be better. I found www.finaaid.org to be a wonderful source of information and it's up to date as well. Use the site map and look through the sections on private loan consolidation (there's also a list of lenders and rate ranges) or on private loans in general if you are still in school.

I'd rather have had an opportunity to consolidate with loans continuing to be pegged to the LIBOR, but I couldn't find any that would yield a better rate than the PRIME - X that I found.

One caution about using Graduate Leverage (I've used them twice now): beware of promises that you're consolidation rate will be further reduced once you go into repayment and make payments on time. If you begin to make payments -- say you want to make payments early but you are not in repayment yet -- but then stop (e.g., you spend your bonus and then decide to wait until you officially go into repayment), that rate reduction goes away. ONCE YOU START TO MAKE PAYMENTS, YOU MUST CONTINUE MAKING THEM.

What is a "student loans?"

I did my loans (about $100k) through northstar http://www.northstar.org/. They are great. They are a non profit organization so i'm not sure if that is why, but I never paid any fees. And when it came time to reconsolidate, one of their operators talked me through doing something that I didn't originally think of, which wound up saving me about $2,000. Also, they give you a dividend on your loans, so every month, they pay about $50 towards my loans. I can't say enough good things about them.

Word of warning about Sallie Mae: A huge part of their business is the *collection* of student loans, so they *want* you to default on your payments. Everyone I know that has loans with them hates them.

I've had a great experience with Access Group. Their rates are competitive, their interface is easy to use, and their customer service is probably the best I have ever experienced, from anyone. I highly recommend them.

When I wanted to refinance I called them up and they walked me through the process. It didn't take long, and now many of my loans are locked in at rates as low as 2.75%.

12:10 & 12:25 -

The universal default provision only is an issue of you ... wait for it ... default on the payment of another card. If you pay your balance in full each month on your credit card or at least pay the minimum required balance, then you should not be concerned about the universal default provision.

I should add that I would never transfer student loans to a credit card, except for on a short term basis. If you anticipate paying off the loan in 8 to 12 months, it is probably worth it. If it is going to be longer than that, there are number of other factors that you must consider as highly relevant such as:
- job stability (with a student loan, if you are terminated, you can often get an additional deferral; not so with a credit card)
- credit rating (it is my understanding that student loan is considered "good" debt, while large credit card balances are "bad" debt - even if paying the minimum)
- available credit (if you are going to max out your card to transfer the debt -- and what would be the point if you are not going to transfer ALL the debt -- you need to consider whether you will need your credit card for anything else until that balance transfer is paid off)

In short, the decision to transfer a balance to a cc is one that has to be made carefully and with solid reasoning. Just b/c a cc offers a low rate doesn't mean you should jump at it. But, if the circumstances are right, then there should be no problem with such a move.

I've had good luck with Graduate Leverage. Previous problems with them selling loans are being taken care of--they're starting to service their own loans now. Also, not true about missing a payment and losing the promotional rate--you just need to get X number of payments in a row and then you qualify for that rate. Thankfully, I have about $125K of my $185K (undergrad/ grad/ law) locked in at 3.625 going down to 2.625 after 30 on time payments. Why would I ever pay that off early? I'm planning on paying off the high interest private loans (I, too, hate Citibank and, worse, AES) and then enjoying my low rate!

Anyone else think someone at graduateleverage.com went to law school and still reads ATL religiously?

Nah, just a bunch of us Harvard folks that got sweet deals from them... Most of all they save you time by going through all the offers and bringing you the best one...

(re: graduate leverage)

Lender/Consolidation Spam!

My strategy is to wait for someone to take Fight Club too seriously and blow up all debt records.

You are poor
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What problems have people had with AES?

What problems have people had with AES?

I'm curious to know what problems people have had with AES.

I consolidated my federal loans in 2005 with a small regional lender in Illinois. I locked in a 2.875% fixed rate with up to 1.25% in incentive reductions. I'm currently paying 1.625%. My loans were recently sold to Sallie Mae due to Gov. Blago and I've had nothing but trouble. I have to constantly monitor my loans as they repeatedly try to take away my incentive and raise my monthly payment amount for no reason. I do not recommend this lender.

OK, people, question: I am a first year, so it's my last year before the student loan interest deduction phases out. This year I had (1) a bunch of interest accrue on my HUGELOAN (none of which we paid since I am only going into repayment now) and (2) a li'l bit interest accrued on my wife's old undergrad TINYLOAN (all of which we paid). So, how much can we deduct - only TINYINTEREST, or also HUGEINTEREST?

Why would anyone take out loans since can foot the entire bill?

Anon 02:56, thanks for the heads up. I have about $300k in debt, half of which is through Sallie Mae for private loans. They pulled some similar tricks on my sister, and it took weeks to fix things for her. I should have realized it was a crapshoot when their 1-800 line has "If you are calling from a Congressional office, press [number]." But yes, I'm poor. First in my family to go to college and law school.

If you consolidate, does that prevent you from paying off the loan once you get your bonus? Is there a penalty for this?

Sallie Mae is the worst ever. My loans with them are at close to 2x the interest rate as my other private loans (with citibank) and almost 4x my federal student loans (with direct student loans servicing).

Anyone know anything about transferring student loans from one private lender to another if you've already graduated and are currently working? Wondering if looking up info re: Access or graduateleverage would matter at this point.

AES wouldn't allow me to get an in-school deferment, yeah, an an-school deferment for my grad loans while I was in law school. High rates too. So, I had to start paying that loan while I was in law school.

All I remember is that our law school guy said Graduate Leverage was the best, and I used them. Is that so wrong?

Those with higher rate loans who own property may want to consider refinancing the property. Up to $100k of home equity may be used for any purpose and the interest payments are tax deductible.

I posted earlier without realizing somebody else had posted as "Access Fan." Just to clarify, we're separate people.

To my knowledge you can only take a credit for tinyinterest on tinyloan because that is what you paid in 2007.

Fortunately the max you can take is $2k so presumably you're not missing out on too much. Unfortunately, to my knowledge, it is a credit which means direct reduction of $$ owed in taxes (rather than a deduction which reduces your AGI which results in lower taxes but not as much as a tax credit).

Welcome to the (not-so) good (tax) life.

re 4:24 - yes, stripping the equity out of your home in a falling market is a GENIUS idea! welcome to the road to ruin!

Max you can take is $2500. Google, people!

Most reputable student loan companies allow for prepayment with no penalty.

Paying for law school? Isn't that my law firm's job? Along with raising my salary yet cutting my billable requirement during LS?

If you are going to consolidate, DO NOT use Chase. I consolidated with CFS/Suntech -- who later were bought by Chase -- and they were absolutely terrible to deal with. Dumb, incompetent, and terrible customer service.

I am now a 2L. When I get done, I will have probably $20,000 in debt- ALL of it subsidized Stafford. Right now my lender is Sallie Mae (even though it's federal $$). Can I "consolidate" this debt with another company for a cheaper rate? i thought the federal Staffords will always stay at the 6.8% or whatever it is.

The student loan interest deduction reduces taxable income, not tax owed. Its value to you will vary depending on your marginal tax rate-- because it reduces the amount of your income that is subject to tax. If you pay $2500 in student loan interest and your marginal rate is 28%, then the credit will in most cases save you $700 in federal tax. Depending on your state's tax laws, the deduction may also carry over to reduce your state tax liability.

Consolidation of federal student loans, in and of itself, does not remove the protective features (deferment, forbearance, forgiveness in certain situations) of those loans. Rather, it is consolidation of federal loans with private loans that can remove the protective features of the federal loans.

You would also obviously lose the good things about the federal loans, including any rate cap (my Stafford loans were always capped at 8.25%; this has nothing to do with consolidation), if you pay them off with a credit card or home equity loan. And though the previous poster is right that universal default provisions do not kick in unless you miss a payment on another card, if you plan to carry the debt for a while, it seems to me to be a huge gamble to bet that none of your credit card payments over a number of years will be late. The chances of that happening if you ever happen to switch banks, for example, are pretty high.

For the same reason, when choosing a lender, I would think about going with THE because their on-time payment bonus starts right away and does not go away forever after a single late payment. Read the fine print about on-time payment bonuses-- you may lose them if you take a forbearance, for example.

It's already been said, but I'll throw in another plug for Graduate Leverage. Couldn't be happier with the rates they got me, both for my private consolidation and my stafford consolidations. Their customer service is top-notch as well.

Chase sucks.

I consolidated with Citibank. Almost every interaction with them has been unpleasant. All mistakes have been in Citibank's favor and have required multiple phone calls to untangle. One customer "service" rep told me that my file was a mess in the computer because I had called "too often." My retort? If information like which repayment plan I'm using, the date my last payment was processed, or how my interest is calculated (because Citibank's calculations are unique and, as noted, in their favor every time) was available *anywhere* on the website, I would not need to call. If I want to pay extra one month against one particular loan (rather than all of them), I cannot use the website. Instead, I have to send them a paper check to a special address not listed on the website, with a letter identifying which loan I wish to pay down, and clearly specifying that the payment should go against the principal. If not, they will default to spreading the payment against the interest on all the loans. About 18 months ago, my payments mysteriously increased when interest rates remained unchanged. Three phone calls and three creative explanations later, I spoke to a supervisor. Her casual answer was that Citibank initially loaded my loans on an unallowably long repayment schedule and had caught their error via internal auditing. So they adjusted it. Without informing me or noting this on my account so that a low-level customer service worker could explain it to me when I called. No apology. Nothing about, Oops, sorry we were wrong and hope that our mistake did not blow your monthly budget. Just a stern reminder--as if I'm likely to forget--that I owe them the money.

I recently took my bonus and paid off my private loans. But Citibank had the last laugh: they took so long to process the checks that they charged me an extra $300 in interest. I called and was told they would refund it . . . but that was four months ago. Citibank is loathsome.

I work for a company that helps originate and securitize private student loans. Although it may seem tempting to transfer student loan balances onto a credit card, there are a couple of caveats to bear in mind:

1. Universal default. Do you really want to gamble that you will not miss a credit card payment in the next five, ten, or twenty years? I think that for most people any interest savings are offset by the increased risk of massive interest rate increases. There are, however, situations were this can be very useful, mainly when you plan on paying down the balance within a short time.

2. Forbearance. Most private student loans include provisions to halt or substantially diminish payments for six to twelve months. For most people, this is simply a matter of calling customer service and submitting the correct forms. For most credit cards, however, forbearance is entirely at the discretion of the lender. Your student loan promissory note like contains clauses describing how deferral and forbearance work. Your credit card company likely attempts to sell you a service (called PaymentProtector or something lamely similar) that replicates these causes.

With that said, I've seen people successfully pay down their balances using credit card transfers and other techniques. Then again, I've also seen people take out one hundred and fifty thousand dollars to attend culinary school; if you think law school loans are a gamble, consider your odds of becoming the next Wolfgang Puck.

I've used Sallie Mae and haven't had the problems others have reported here. I was also able to lock in one of those excessively low rates for the subsidized loans, but that was mostly luck of timing (consolidated in late 2003 IIRC). One positive with them, however, is that they are good about letting you pay off only one loan. All you need to do is make the payment and send them an e-mail afterwards. I've been doing that for a couple years now, paying off the higher interest loans one at a time, and have had no problems with it.

check fatwallet finance forum. there is a good thread there on the best loan consolidation deals.

this link should work:

http://www.fatwallet.com/forums/messageview.php?catid=52&threadid=596894&highlight_key=y&keyword1=student

if not, go to finance forum and search for student loans in the title.

Thanks for the tips. I have this year's private debt with Citi and will be sure not to make that mistake for next year's loans or consolitation.

Be careful about that very first loan payment. If you miss it, or its late, you might as well just throw your hands up and walk away from the rate deduction incentives.

Also, keep in mind the due dates and fine print of your payments for a related reason--the sneaky fine print. My loan servicer requires that I make a payment at least once in every 30-31 day cycle. So, technically, I could make an early payment (say pay for the months of Jan - Feb in Jan) and NOT abide by the terms of my rate reduction incentive. Yikes! This tip was passed on to me by a customer service rep when I asked her how people usually managed to lose the incentive.

As for stats: Gov $90k at 2.6 %
(lower w/ incentives after x months of repayment -- this included law, grad & undergrad).
$25k at roughly 7%
(private unconsolidated -- bar loan & law).

11:35, I had the exact same experience you had -- but with Sallie Mae. I've never had any problems with my Citibank loans. Go figure.

Has anyone used National City Student Loans? I noticed that they are named with the Access Group, but they have a separate web site. I'm trying to find the best private loan rates as possible.