Consolidation, Deferment, and Confusion

[jane70]

Hello,

Apologize in advance for my green questions and confusion. I've looked through a lot of threads in Fin Aid but I get lost in all the gobbly-gook of financial aid and become very confused.

I will have about $200k from medical and grad school federal loans plus 20k private loan when I graduate in 6 months. Should I consolidate soon after graduation? Will this affect residency deferment and is there even a residency deferment anymore?

Thank you - Open to all advice!

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[dpmd]

Residency deferment is for loans that were disbursed many years ago (I forget the exact date, but suffice it to say that if you took the usual undergrad to med school path it does not apply to you). You can apply for an economic hardship deferment, but the rule that most residents qualified under has been taken out (although one of my lenders didn't seem to think anything had changed-I will let you know in a few weeks as I have attempted to renew my deferment). Consolidating doesn't really affect eligibility for this deferment. The decision to consolidate, and when, will depend on you loan terms. Consolidation was the best deal for those of us who had variable rates and were able to lock in low rates before they increased. You probably have a mixture of variable (from before they became fixed) and fixed. If the variable rate is set to go up (they announce this in advance around june) it might be worth it to consolidate before july 1. If the only reason you want to do it is for the extended repayment term-you can get that without consolidation. If you want to do it for special incentives, be careful because you may end up losing incentives you got on your original loans. If you are still confused it is because there is no one size fits all answer. Don't rely on consolidation companies to tell you whether or not to consolidate. It might not be deliberate, but they do not give you accurate comparative info (they talk about how much they can save you, but there is a lot they don't take into account). Hope this helps

 

[jane70]

That helps so much! Thank you for writing all that out. I think I just need to figure out how many of my loans are on a variable rate and wait until June to see what they say about rates. I think you can't consolidate until you graduate anyway? Please keep us informed if you are able to renew your deferment. Although I've read even if we pay during residency it isn't an enormous amount per month, something like $350 is what I keep seeing.

 

[Doctor Bagel]

dpmd's advice is spot on about consolidation. I'll just add an update on the Economic Hardship drama -- the Department of Education has extended the current plan for now, but it's still set to change in 2009. A bill has been introduced in the House to have it permanently stay how it is, which is good for most us, so check out the thread below about it and contact your representatives!

 

[mtrlOATgal]

can consolidation occur between different banks and what about between banks in the USA and Canada? what is the loans are taken out on different currencies? is it always advisable to consolidate? if so then which lender should we choose to consolidate with?