Consolidate Perkins Loan?

[Scrub MD]

So I will be starting medical school in August and I graduated from undergrad in Dec. I am using my deferment until June and then consolidating all my ugrad debt.

Should I include my Perkins in that consolidation?

Even though I consolidate my sub with my unsub while out of school, when I start in Aug the interest will stop accruing right?

Will I have to make payments before I start in August?

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[mpp]

Perkins loans won't accrue interest while in school. Consolidate or not it won't make much of a difference since the consolidation rate is right around the Perkins loan rate of 5%.

Interest will stop accruing on your subsidized loans only. The unsubsidized loans will accrue interest as they always have.

You have a 6 month lifetime grace period. You might lose that grace period depending on how you consolidate. If you do then you will have to make payments when you consolidate until you are in school and are granted an in-school deferment.

 

[OSUdoc08]

So I will be starting medical school in August and I graduated from undergrad in Dec. I am using my deferment until June and then consolidating all my ugrad debt.

Should I include my Perkins in that consolidation?

Even though I consolidate my sub with my unsub while out of school, when I start in Aug the interest will stop accruing right?

Will I have to make payments before I start in August?

Do not consolidate Perkins loans with Stafford loans! The interest rates will average, and you will owe much more than you did before.

 

[mpp]

The interest rates will average, but currently the interest rates for Stafford and Perkins are about the same so it does not matter. You can consolidate them together without changing how much you will pay in interest overall. However, be certain that if you do consolidate that the Perkins loan interest remains subsidized while you are on in-school deferment. This will be true if you consolidate with the federal government but may not be the case otherwise.

 

[OSUdoc08]

The interest rates will average, but currently the interest rates for Stafford and Perkins are about the same so it does not matter. You can consolidate them together without changing how much you will pay in interest overall. However, be certain that if you do consolidate that the Perkins loan interest remains subsidized while you are on in-school deferment. This will be true if you consolidate with the federal government but may not be the case otherwise.

This wasn't true last summer when I consolidated. My Stafford loan was 2.77%, and my Perkins loan was 5%.

 

[Scrub MD]

Perkins loans won't accrue interest while in school. Consolidate or not it won't make much of a difference since the consolidation rate is right around the Perkins loan rate of 5%.

Thanks I think I am going to consolidate it.

This wasn't true last summer when I consolidated. My Stafford loan was 2.77%, and my Perkins loan was 5%.

This year the rate is 4.7% last year it was 2.77%.

After July 1st when rates go variable, will it just be that years rate that could go up and down or even the ones I took out in previous years? Like I have some at 2.7 and some at 4.7, could those change? (assuming I don't consolidate).

Should I even consolidate my stafforrd loans anyways since I will be deferring them since I am starting medical school in August?

What is the benefit of consolidating before I start medical school?

 

[OSUdoc08]

Thanks I think I am going to consolidate it.


This year the rate is 4.7% last year it was 2.77%.

After July 1st when rates go variable, will it just be that years rate that could go up and down or even the ones I took out in previous years? Like I have some at 2.7 and some at 4.7, could those change? (assuming I don't consolidate).

Should I even consolidate my stafforrd loans anyways since I will be deferring them since I am starting medical school in August?

What is the benefit of consolidating before I start medical school?

The only benefit is stabilizing interest rates.

 

[mpp]

Thanks I think I am going to consolidate it.


This year the rate is 4.7% last year it was 2.77%.

After July 1st when rates go variable, will it just be that years rate that could go up and down or even the ones I took out in previous years? Like I have some at 2.7 and some at 4.7, could those change? (assuming I don't consolidate).

Should I even consolidate my stafforrd loans anyways since I will be deferring them since I am starting medical school in August?

What is the benefit of consolidating before I start medical school?

I'm not sure of what you might be talking about as proposed legislation will fix rates, not make them variable (Stafford loan rates are already variable). If you have loans at 2.7 then they must have been previously consolidated loans locked in at the low rate from last year. These rates will not change as consolidation is a locked in rate for the life of the loan. If you had Stafford loans that you took out last school year at 2.7 percent and did not consolidate them, then they are at the current Stafford rate of 4.7 percent. Under current law Stafford loan rates change each year, not just for new loans but all outstanding Stafford loans.

The 4.7 percent is the current Stafford variable rate which changes each year on July 1 for all outstanding Stafford loans (while in school or during repayment). The new budget proposal before congress, if passed, would set all Stafford loans to a fixed rate of interest. If passed all current Stafford loans and any new loans taken out in 2006 will be at a fixed rate for the life of the loan. The fixed rate for the proposed legislation is 6.8 percent.

You should consolidate every open Stafford loan you have before July 1 so that you can lock in the current lower rate of 4.7 percent. It is doubtful that rates will ever be this low again, not just because interest rates in general are at historic lows but beause Congress is likely to change laws to not allow student loan interest rates to get so low in the future for which they are losing many billions of dollars each year. Everyone that has outstanding Stafford loans should consolidate (you can consolidate even if you have one Stafford loan).

In regards to Perkins loans I will repeat just so that it is clear. Consolidate your Perkins loans only if you are certain that you will retain the subsidized status such that there will be no interest accruing while on in-school deferment.

 

[Scrub MD]

I have not consolidated anything yet. When I was looking at my stafford loans online at nslds.ed.gov, it had all my loans (sub and unsub) and what each interest rate was that year (3.5, 2.7, 4.7). I was thinking when I consolidated this year b4 July 1, that the interest rates would average based on a weighted average depending on the amount of money with each interest rate.

I am sorry but loans/repayments make no sense to me. Thanks for your help because now I actually know why/when I need to consolidate and will consolidate my Perkins as long as it stays subsidized.

So basically it will suck when I am in medical school with the interest rate maybe at 6.8%. How much of medical school loans are sub/unsub?

 

[OSUdoc08]

I have not consolidated anything yet. When I was looking at my stafford loans online at nslds.ed.gov, it had all my loans (sub and unsub) and what each interest rate was that year (3.5, 2.7, 4.7). I was thinking when I consolidated this year b4 July 1, that the interest rates would average based on a weighted average depending on the amount of money with each interest rate.

I am sorry but loans/repayments make no sense to me. Thanks for your help because now I actually know why/when I need to consolidate and will consolidate my Perkins as long as it stays subsidized.

So basically it will suck when I am in medical school with the interest rate maybe at 6.8%. How much of medical school loans are sub/unsub?

STAFFORD


Sub: $8,500

Unsub: $30,000

 

[aquaboy]

A question I have is if we don't consolidate our Perkins loans can we still get residency deferment on those loans or do we have to consolidate them to get deferment.

Also, any official news on whether or not the house has passed the refinancing law yet, if so I will consolidate this year since rates will go up about 2% next year?