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Consolidate undergrad loans?

Discussion in 'Financial Aid' started by NKMU, Oct 15, 2002.

  1. NKMU

    NKMU Senior Member
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    I'm thinking about consolidating my Federal Direct loans that I used to pay for part of my undergraduate education. I just graduated in May, and I'm still in my grace period.

    Assuming I am eventually accepted to a medical school, will having consolidated have any adverse effects? Will I still be able to defer my undergraduate loans while in med school? Will consolidating now affect my ability to get loans for medical school?

    SDN is not my only source of information-- I've contacted a few persons and institutions to get more info. I just wonder what others in similar situations have decided to do.
     
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  3. Harry Truman

    Harry Truman Senior Member
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    If you consolidate, you will still be eligible for an in-school deferment when you go to medical school. I can't speak with absolute certainty, but I am pretty sure that consolidating will have no effect on your eligibility for loans to pay for med school. I too just graduatedfrom undergrad. I just submitted my consolidation application to Sallie Mae last week. Also, I'm going to med school in August (deferred matriculant) and I am not worried about getting loans to pay for it. As long as your credit is still good, you should have no problem getting loans for school.
     
  4. mpp

    mpp SDN Moderator
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    When you consolidate, be sure to read the fine print carefully and if the loan officer promises you something be sure that they show you where it says that in writing. Understand what your options are for medical school deferrment, hardship deferrment during residency as well as possibilities for consolidation again in the future with your medical school loans. It would be nice to lock in these current ultra-low rates, but may not be the best choice if you lose deferrment eligibility or future consolidation ability.
     
  5. LoanGrl

    LoanGrl Member
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    An important thing to note here is that YOU CAN ONLY CONSOLIDATE ONCE. So if you consolidate your undergrad loans now, you will not be able to consolidate your medical school loans later, which will be the bulk of your eduation loans. (Unless the feds change the regulations, of course). Even though interest rates are great now, your best bet is to wait until after you are finished with medical school and know where you are going to be doing your residency, and what your income and expenses will be. That way if consolidation throws you into repayment, (read the fine print!), you'll know what you are dealing with.
     
  6. Harry Truman

    Harry Truman Senior Member
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    I called Sallie Mae prior to consolidating, and asked if I would be able to consolidate again in the future. The response I got was that I would not be able to reconsoldiate my consolidation loan just to get lower rates. However, one can reconsolidate if, and only if, one is adding additional loans. For example, after medical school one can consolidate his/her consolidation loan from undergrad and any loans taken out to pay for medical school.

    I'll try to find a policy in writing somewhere in just a moment.
     
  7. Harry Truman

    Harry Truman Senior Member
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    Straight from Sallie Mae:

    Can I add loans to a Federal Consolidation Loan after it has been issued?

    Yes. You can add one or more eligible existing or new loans to the consolidation no later then 180 days following the issue date of the Federal Consolidation Loan.

    *****In addition, you may also reconsolidate your existing consolidation loan with any eligible loans that were left out of the earlier consolidation. ********


    Source: Sallie Mae Consolidation FAQ
     
  8. LoanGrl

    LoanGrl Member
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    Thanks for the info, we learn something new every day! We looked up the Federal regs, and indeed it does say that if you add new loans you can consolidate again. I should rephrase my earlier statement to say, "Once you consolidate all your loans,
    you cannot consolidate again!"
    Consolidation is a confusing issue for everyone, financial aid offices included. Wise of you to ask questions, it's important to be proactive and informed.
    :)
     
  9. paean

    paean Senior Member
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    If you consolidate while in grace, you lose your grace period (so do it in the end of the 6 months).

    Consolidating won't alter your ability to get med school loans. It won't change your ability to defer for school, or get a hardship deferment for residency unless you have loans from the very early 90s or before (those had different rules, and if you consolidate them, they lose some of the deferment options, and are treated as if they were issued more recently).

    You will be able to consolidate (seperately) your medical school loans. While you can only consolidate any individual loan once, consolidating loan X has no bearing on the ability to consolidate loan Y at some later date.

    So go ahead and lock in your low interest rate, just make sure you read all the fine print before you sign.
     

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