Graduate Leverage/Consolidation

Check out College Ave student loan options: https://www.collegeavestudentloans.com/lp/product-choice/?utm_campaign=bank%20partner%20referral_casl&utm_source=hpsa&utm_medium=partner&utm_content=hpsa&brand=college%20ave&product=inschool&p_aff=hpsa&goal=acquisition
This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
P

princebargain

Member
10+ Year Member
5+ Year Member
15+ Year Member
Joined
Sep 25, 2005
Messages
31
Reaction score
0
Is anyone consolidating through Graduate Leverage? Anybody know the reliability of these guys? They seem to be very knowledgable, and I think they utilize loopholes and collective bargaining powers to negotiate their rates.

I've already consolidated my MS1-3 loans with T.H.E. at 2.85%; they are a reputable company. Graduate Leverage guys suggested I consolidate my MS4 loan together with MS1-3, and they can STILL get the 2.85% rate. Even more unbelievable (literally), is that they claim to knock off 1% after 36 consective payments, bringing it down to 1.85%!!!

I find this to be too good to be true, as other lenders are consolidating at 4.85% + benefits.

Should I just go with T.H.E.? My MS4 loans are with MedPreferred, who is gonna screw me out of the 4% rebate upon graduation if I consolidate. Thoughts?
Members don't see this ad.
 
I am wondering the same thing. I am only a second year, but the idea of being able to get 2.875% on my loans from this year (consolidated last year), seems great. In fact, too great to be true, making me a bit skeptical and worried it is a scheme of some kind. I dont want to get screwed (its way too much money!) but I would hate to miss out.

Anyone tried them? Any words of wisdom?
 
I don't know. It sounds a little shady to me, but it may still be legit. I consolidated last year for MSI-III at 2.8%, and I just consolidated my MSIV with that loan, using MedLoans, but they gave me 3.25% as my interest rate on the new consolidation loan (MSI-IV) and will knock off another .25% if I chose to have the payments taken directly out of my savings or checking account when I enter repayment. They will also knock off another 1% after 48 on time payments. The only thing was that I lost my 3% refund. If I make 33 consecutive on-time payments though, I get some other type of refund, but I am not sure how much it will be.
 
Members don't see this ad :)
check out www.theloanster.com. They work with big partners - like US Bank and AES - and they offer great borrower benefits that you actually get to keep. Watch out for other consolidators who bait you in with attractive benefits but those benefits turn out near-impossible to get and keep.
 
Hi guys,

I need advice on what to do: I have stafford loans through Citibank and other stafford loans through AES. If I consolidate the federal loans under Citibank, my interest rate will not improve that much. Also, I am about to go to med school in the fall (to an expensive private school).

My financial aid office in grad school told me to wait to consolidate until I start med school, but that was before I went back for a post-bac program and I am now being hounded by consolidators (especially Citibank). Consolidating makes a lot of sense, but I am hesitating due to the advice I received previously. Any help/advice would be appreciated.

Thanks!
 
We got this from our Financial Aid Office - not sure if this changes your thoughts at all or how to interpret it:

There is much concern among medical school financial aid officers nationwide over Graduate Leverage. Their tactics are to contact the students directly and bypass the financial aid office. This company is paid to get you to change your lender and consolidate with a company with whom they have partnered. They are making you think that they can get you a better deal. However, I highly recommend that you consolidate with the lender that you have been using.



I have put much time and research into choosing reputable lenders who have competitive borrower benefits. Loan consolidation information from our preferred lenders is available in my office, along with the lender-associated benefits. The consolidation process is fairly simple and may be done online. Our preferred lenders do not sell your loans. If you are a current student and consolidate with a lender recommended by Graduate Leverage, you will have loans at different servicing centers. I don’t even know who services these loans, and that is an important issue. You could be dealing with your servicer for perhaps 30 years. Please think carefully before you change lenders.



I know you are currently bombarded with consolidation offers, and Graduate Leverage has presented very attractive information; but it really is simple—you should consolidate with the lender that you are currently using.
 
After seeing their presentation on campus, I used Graduate Leverage to consolidate my first three years of med school loans. They screen some of the same lenders that debtexpert mentioned but use collective bargaining to force these lenders to treat graduate students a little better. All of the benefits they mentioned during their presentation are put in writing and they also require any lenders they use to sign a letter stating that the loans cannot be sold. This year’s benefits are even more attractive and I will be using them again.

Abbaroodle – wondering why your financial aid office would recommend not researching your consolidation options for yourself? That’s kind of like saying just because you’ve done something in the past, you should continue to do it regardless of how compelling the alternatives might be…seems shortsighted to me.
 
First off let me preface this thread with the fact that I have used graduate leverage to consolidate my loans last year and they are everything they say they are

I am a chapter rep for the ama and organized a Graduate Leverage presentation at my school so i am very experienced in their actions.

I am in the process of consolidating my last year of Med school loans with them and they will in fact reduce your weighted portfolio interest rate down to last years interest rates. They do that by negotiating with the lenders and reducing the lenders profits margins.

Somebody mentioned about going with a company that will in fact let you achieve your benefits. Graduate Leverage is the only company that I know of that forces its lenders to put IN WRITING that they can never sell their loans. When big companies sell their loans to an outside company, the new company does not have to honor your borrower benefits.

In reference to the financial aid office- We had the same situation where our fin aid office refused to let graduate leverage present. I found out that our fin aid has deals with big companies, in our case specifically Sallie Mae, where they get perks like trips, office computers etc... for keeping their students from consolidating with other companies. In the end it costs us more money. Im paying between 40-50k a year and im not paying more for my student loans bc our fin aid wants new computers. I love my school but i love money better

Sorry for the long post, but I have had extensive talks with them when i brought them to present at my campus and i feel like i had to defend them because they will be saving me a lot of money.
 
I am glad that you have had a pleasant experience with Graduate Leverage. They do have a decent product. However, there entire model is a suspect. They use words like "leverage" and "recommendations" yet they only recommend the one product that they have, through the one lender they work with. It is by no means a comparitive service.
As for Financial aid offices having "deals" ..I am sure that this is the case. Bear in mind, though, that these schools also have to keep their interests in mind. If these loans are sold everyone could be affected.
An agreement between the lender they work with and you is props to that lender not Graduate Leverage. If you choose any consolidator, look for names that have been around. (Aes for example has been around for 30 years and works with a number of consolidators)
As I said, it's a good product, but there are others out there that are more straight forward...
 
As for AMA, I have no idea what is paid to the association to facilitate these presentations. Looking through the AMA site I see several lenders advertising. It is what it is. Marketing 101.



MedMan2005 said:
First off let me preface this thread with the fact that I have used graduate leverage to consolidate my loans last year and they are everything they say they are

I am a chapter rep for the ama and organized a Graduate Leverage presentation at my school so i am very experienced in their actions.

I am in the process of consolidating my last year of Med school loans with them and they will in fact reduce your weighted portfolio interest rate down to last years interest rates. They do that by negotiating with the lenders and reducing the lenders profits margins.

Somebody mentioned about going with a company that will in fact let you achieve your benefits. Graduate Leverage is the only company that I know of that forces its lenders to put IN WRITING that they can never sell their loans. When big companies sell their loans to an outside company, the new company does not have to honor your borrower benefits.

In reference to the financial aid office- We had the same situation where our fin aid office refused to let graduate leverage present. I found out that our fin aid has deals with big companies, in our case specifically Sallie Mae, where they get perks like trips, office computers etc... for keeping their students from consolidating with other companies. In the end it costs us more money. Im paying between 40-50k a year and im not paying more for my student loans bc our fin aid wants new computers. I love my school but i love money better

Sorry for the long post, but I have had extensive talks with them when i brought them to present at my campus and i feel like i had to defend them because they will be saving me a lot of money.
Click to expand...
 
Magicrat- I am not sure what is suspect about it in terms of their model. They saved me money last year what is suspect about that.

The Terms leverage from online dictionary states

leverage
strategic advantage; power to act effectively; "relatively small groups can sometimes exert immense political leverage"

Replace the world political with ecomonic and you have a pretty accurate description. They are increasing the power of students by combining their voice so they can negotiate for rates that are other wise impossible to receive alone.

The word recommendation refers to when they recommend actions by educating borrowers about how to best manage debt. Instead of throwing a cloud of confusion over consolidation process they will help you understand why you want to do things and RECOMMEND specific steps to maximize your savings.

In terms of comparison- They compared the benefits from my existing lender, Sallie Mae, to what i would achieve and how much I would save. I like comparing dollars to dollars and they did that for me

Finally, regarding your pitch of AES. Graduate Leverage used AES last year however has opted to go with different lenders so that they could obtain better rates and benefits this year.
 
sgac said:
Hi guys,

I need advice on what to do: I have stafford loans through Citibank and other stafford loans through AES. If I consolidate the federal loans under Citibank, my interest rate will not improve that much. Also, I am about to go to med school in the fall (to an expensive private school).

My financial aid office in grad school told me to wait to consolidate until I start med school, but that was before I went back for a post-bac program and I am now being hounded by consolidators (especially Citibank). Consolidating makes a lot of sense, but I am hesitating due to the advice I received previously. Any help/advice would be appreciated.

Thanks!
Click to expand...

This is no longer accurate advice. You absolutely need to consolidate this year, because the terms will change forever in June/July. You can get fantastic interest rates now, which you will never see again (like less than 3%).

IMMEDIATELY start getting in touch with companies and compare terms. A few options:
Direct Loans
AMSA
Graduate Leverage
 
But if you consolidate with Direct Loans Ii dont think you get any of the benefits like interest rate reductions. Dont you have to go with a private company to get those?


MeowMix said:
This is no longer accurate advice. You absolutely need to consolidate this year, because the terms will change forever in June/July. You can get fantastic interest rates now, which you will never see again (like less than 3%).

IMMEDIATELY start getting in touch with companies and compare terms. A few options:
Direct Loans
AMSA
Graduate Leverage
Click to expand...
 
Members don't see this ad :)
MedMan2005 said:
But if you consolidate with Direct Loans Ii dont think you get any of the benefits like interest rate reductions. Dont you have to go with a private company to get those?
Click to expand...

I listed the 3 companies to give a range of options. Direct Loans is the conservative, any-school-would-approve-it option. Graduate Leverage is offering incredibly low rates. AMSA (American Medical Student Association) offers good loan consolidation counseling; look on their web page.
 
If you have the option of consolidating with direct take it. You can re- consolidate for the borrower benefits later. This way you save the automatic grace. Direct consolidation allows for a ffelp consolidation to accrue the borrower benefits direct does not offer.
 
From the GL website:

Welcome to Graduate Leverage

Graduate Leverage ("GL") is a full service debt management provider that offers you peace of mind throughout your entire consolidation process. Through our Personalized Reservation System we are able to access your loan information and provide a recommendation on which loans should be consolidated, the optimal timing and which lenders extend the most favorable terms. This ensures you will lock in the lowest possible rate with a lender who offers attractive incentives.

Student Loan Consolidation from Graduate Leverage

Graduate Leverage (GL) is a student loan consolidation and debt management company founded by post-graduates from Harvard, Boston College and the UC Irvine College of Medicine. Working with the nation's top financial aid offices and student body organizations GL provides an unbiased source for information on student loan consolidation and debt management.

MedMan2005 said:
Magicrat- I am not sure what is suspect about it in terms of their model. They saved me money last year what is suspect about that.

The Terms leverage from online dictionary states

leverage
strategic advantage; power to act effectively; "relatively small groups can sometimes exert immense political leverage"

Replace the world political with ecomonic and you have a pretty accurate description. They are increasing the power of students by combining their voice so they can negotiate for rates that are other wise impossible to receive alone.

The word recommendation refers to when they recommend actions by educating borrowers about how to best manage debt. Instead of throwing a cloud of confusion over consolidation process they will help you understand why you want to do things and RECOMMEND specific steps to maximize your savings.

In terms of comparison- They compared the benefits from my existing lender, Sallie Mae, to what i would achieve and how much I would save. I like comparing dollars to dollars and they did that for me

Finally, regarding your pitch of AES. Graduate Leverage used AES last year however has opted to go with different lenders so that they could obtain better rates and benefits this year.
Click to expand...
 
My "pitch" of AES was an example, you can substitute CFS, Sallie Mae, Nel Net, etc. The consolidator that is selling off loans is the exception.
 
I do know that there are a lot of financial aid offices that would be surprised by the statement regarding "working with.."
 
I have only $5,500 in loans right now (currently in school and will be for the next few years). If I don't consolidate, are you guys saying my interest rate on that loan is going to go up to that higher fixed rate?

If I consolidate now, which lender lets me keep my grace period and borrower benefits?
 
UserNameNeeded said:
I have only $5,500 in loans right now (currently in school and will be for the next few years). If I don't consolidate, are you guys saying my interest rate on that loan is going to go up to that higher fixed rate?

If I consolidate now, which lender lets me keep my grace period and borrower benefits?
Click to expand...


Your rates remain variable. With weighted averaging there is no reason that you should concern yourself with consolidating at this juncture.With the pending elimination of the single lender rule, lenders will be engaging in price wars in the near future.

There is a new company that will be coming out shortly where you can compare consolidation products.


http://www.consolidationcomparison.com/
 
Going to reserve judgement until I do more research, but here is some food for thought.

First I would like to say an age old adage, "there is no such thing as a free lunch."

Secondly, I believe in capitalism. If Graduate Leverage can do it, there is no reason why no other company can't offer similar deals. In fact, NOBODY comes even remotely close to these guys. You might get an unbelievable deal on a Rolex watch... but there's a chance that you get what you pay for, a FAKE Rolex.

I've done some research and really drilled their rep. I've got some answers, but nothing to hang my hat on.

Got a recommendation in my e-mail from them today.

1) The loan is originated by US Bank and funded by Brazos Higher Ed. Who is Brazos? http://www.bhesc.org/ That is all I know about Brazos.

2) "New Loan Rate Reduction: Lender will consolidate all new 4.7% loans at borrower’s previous consolidation rate (2.875% for most)." .... what does "for most" mean???

3) Love the "Total Interest Paid" savings chart they provide. Note how the Y-axis of the graph is artificially truncated so that the "savings" portion is emphasized. This tells me that these guys are not only good in finance, but great in marketing and advertising. Harvard MBA grads indeed.

4) Their recommended servicer is Student Assistance Foundation. Who are they? http://www.safservices.org/SAF/start.jsp?currentMenuName=About Us&content=about_us.jsp Reviews on these guys anyone?

5) Keep in mind, Graduate Leverage is a relatively new company with little proven track record. What they did last year doesn't tell me ANYTHING. Why? Because those of you who consolidated with them LAST YEAR, have NOT entered into repayment yet. If anything happens, that will be the time when **** hits the fan.

6) Again, keep in mind, Graduate Leverage is basically finished this year as a business as consolidation as we know it, will cease to exist. (6.8% fixed next year).

I am a bit paranoid yes, but I need to make sure I'm not going to get screwed. I have more thoughts, but I leave it for now as this post is getting long.

Chime in folks! There's gotta be more students than this!!!
 
magicrat said:
Your rates remain variable. With weighted averaging there is no reason that you should concern yourself with consolidating at this juncture.With the pending elimination of the single lender rule, lenders will be engaging in price wars in the near future.

There is a new company that will be coming out shortly where you can compare consolidation products.


http://www.consolidationcomparison.com/
Click to expand...

What's "weighted averaging"? Thanks so much for the response, magicrat!

princebargain said:
I am a bit paranoid yes, but I need to make sure I'm not going to get screwed. I have more thoughts, but I leave it for now as this post is getting long.

Chime in folks! There's gotta be more students than this!!!
Click to expand...

I hate how dead this forum is compared to others. I appreciate your research and posting about it! I'm just starting to figure out what lender to choose and how to compare benefits and then the next step is to look forward to benefits/pitfalls of consolidation.

I was considering taking out my Stafford loan from Brazos (they're one of my undergrad school's preferred lenders). They had a sweet deal, but I went with Wachovia in the end because the benefits seemed slightly better and Wachovia was more prompt/attentive.
 
UserNameNeeded said:
I have only $5,500 in loans right now (currently in school and will be for the next few years). If I don't consolidate, are you guys saying my interest rate on that loan is going to go up to that higher fixed rate?

If I consolidate now, which lender lets me keep my grace period and borrower benefits?
Click to expand...

Your interest rate is certainly going to go up. It does make sense to do an in-school consolidation, even with $5500. Please look into this; you can save yourself a pile of money. Start with Direct Loans.
 
MeowMix said:
Your interest rate is certainly going to go up. It does make sense to do an in-school consolidation, even with $5500. Please look into this; you can save yourself a pile of money. Start with Direct Loans.
Click to expand...


I am almost positive you need a $10,000 balance to consolidate
 
People, for all intents and purposes, the Graduate Leverage advertised rate of 1.85% is fantastic. That barely keeps up with inflation!!!

Knowing this, I found out that Graduate Leverage makes money on a flat rate per loan consolidated, which runs anywhere from 2-5% of the value of the loan. As you can imagine, the lender is making something along the lines of:

1.85% - the G.L. commission

I've got an answer from my G.L. rep, though I can't pretend to say that I understand it entirely. I strongly encourage you folks to find out as much info as possible, and we'll compare notes at a later date. Namely, even with collective bargaining, why would a lender bend over backwards to give students a cut throat interest rate?

I don't care how big a union is, a company would rather go under than to submit to financially unfavorable terms. See United Airlines, GM, Delta, etc...

My two cents.
 
Current Consolidation Interest Rate.

The interest rate for a Direct Consolidation Loan is the weighted average of the interest rates on the loans being consolidated (as of the date we receive the application), rounded to the nearest higher one-eighth of one percent. This rate is fixed for the life of the loan and cannot exceed 8.25 percent.
Six steps to calculate the Weighted Average Interest Rate

Step 1:

Multiply each loan by its interest rate to obtain the "per loan weight factor."

Step 2:

Add the per loan weight factors together.

Step 3:

Add the loan amounts together.

Step 4:

Divide the "total per loan weight factor" by the total loan amount and then multiply by 100.



Step 5:

*Round the result of Step 4 to the nearest higher one-eighth of one percent if it is not already on an eighth of a percent.
 
princebargain said:
People, for all intents and purposes, the Graduate Leverage advertised rate of 1.85% is fantastic. That barely keeps up with inflation!!!

1.8% is possible because of weighted averaging. If you have 160,000 already consolidated at 2.875% and you consolidate it with this year's 25,000 in unconsolidated loans at 4.7%...the federal interest rate equals 3.125%; take the ACH .25% reduction, and the 1% interest rate reduction offered in the borrower benefit package and voila...1.8% (1.875 to be exact) You can plug different combinations into the loan calculator at theloanster.com to see more
Click to expand...
 
I have 120k with sallie mae which is currently at 2.875% another 29k at 4.7% and 23k in perkins loans at 5%. I belive my weighted weight for those loans is in the mid 3%'s. When all is said and done Graduate Leverage will bring my entire portfolio down to 1.875% even for my perkins. I know i have to pay the interest on the perkins when i consolidate, but i dont care in the long run it will be saving me more money having it accrue interest at a lower rate.

Magicrat- do the calculations still hold true for my loans that were performed on your previous post

magicrat said:
princebargain said:
People, for all intents and purposes, the Graduate Leverage advertised rate of 1.85% is fantastic. That barely keeps up with inflation!!!

1.8% is possible because of weighted averaging. If you have 160,000 already consolidated at 2.875% and you consolidate it with this year's 25,000 in unconsolidated loans at 4.7%...the federal interest rate equals 3.125%; take the ACH .25% reduction, and the 1% interest rate reduction offered in the borrower benefit package and voila...1.8% (1.875 to be exact) You can plug different combinations into the loan calculator at theloanster.com to see more
Click to expand...
Click to expand...
 
no sure I understood your question

I do know that Gl has the perkins deal, but I believe that also has tax implications similar to receiving a principal reduction
 
Magicrat. I know where the 1.85% comes from. My point is, I don't know how or why they would be so generous as to give us such a great rate (assuming there is no catch).

No other lender comes close. Remember, the lender (ie. Brazos/US Bank) also pays Grad Leverage a flat fee commission of 2-5% per loan consolidated. This means the lender's profit margins are quite slim indeed.

I requested the offer terms in writing, and I'll go over it with a fine tooth comb. Grad Lev hasn't gotten back to me yet.
 
Where does the 2-5% come from?
 
You would think that since medical students have to take out such HUGE amounts of loans (probably only second or equal to people mortgaging homes, in terms of average debt amounts), there'd be sweeter deals on interest rates and benefits. :(
 
MedMan2005 said:
Where does the 2-5% come from?
Click to expand...

I asked the Grad Lev rep who gave a talk at our school. He told me they get a flat fee that is about 2-5% of the total value of the loan, which at our school means $4000-$10,000 per graduating student. Its no small sum.

Does Grad Lev have a vested interested in obtaining your consolidation loan business? Heck yeah.

But the even bigger question is, if they take such a big cut, why can't the lenders (eg. Brazos, US Bank) eliminate the middle man (Grad Lev) and pass the savings onto the customer. It would be a win-win situation (of course meaning Grad Lev loses). What perplexes me is how the lender stands to profit if rates are so low AND they still have to pay the middle man.

I was given an answer. Let me know what you guys find out and we can compare notes.
 
I believe that a big item is the borrower benefits, or lack there of. One late payment can eliminate the benefit giving an additional 1% back to the lender/consolidator. I don't have exact numbers but I do know the majority of borrowers never realize the full benefits that brought them to the table in the first place ..I'll try to dig up some percentages from the dept of ed
 
One more thing... this is an excerpt from the Grad Lev recommendation e-mail.

"Lastly, in addition to the rate incentive, SAF will give you the ability to preserve your grace period by placing your loans into forbearance and paying all subsidized interest. This removes the one previous drawback to completing an in-school consolidation."

What this sounds like is by going through with their consolidation, economic hardship deferement is voided, and instead is replaced by forebearance. However, Grad Lev makes it SEEM like deferement because somehow Grad Lev negotiated for the lenders to pay the interest on our subsidized loans.

This "subsidy" is huge, as interest accrued for subsidized loans for 3 years of forebearance is not small. Long story short, my previous estimate of the lenders profit margin is EVEN SMALLER.

It is now:

Lender profit equals:

Interest borrowers pay MINUS (G.L. flat commission) MINUS (forebearance subsidies on subsized Stafford loans)

or

1.875% - (2 to 5%) - (2.875%) = NEGATIVE!?!?! :confused:

Which begs the question, how on Earth is it possible for these consolidating lenders to make money?! Doesn't anyone else see this apparent discrepancy? It doesn't make any sense.

AGAIN, it doesn't matter what Grad Lev did with last years loans. I suspect that all students/residents that have gone through Grad Lev have NOT entered into repayment status yet (ie. still in residency). So, the EXACT terms and conditions negotiated have not been put into test yet...
 
magicrat said:
I believe that a big item is the borrower benefits, or lack there of. One late payment can eliminate the benefit giving an additional 1% back to the lender/consolidator. I don't have exact numbers but I do know the majority of borrowers never realize the full benefits that brought them to the table in the first place ..I'll try to dig up some percentages from the dept of ed
Click to expand...

Grad Lev told me about 60% of their customers get the benefits vs. ~40% for industry. I'm not sure why this is so low since everyone should sign up for auto payment to get the 0.25% reduction. According to T.H.E. 95% of their borrowers get benefits. Who do you believe?
 
I actually called and got a few answers to your questions-

Pricebargain- In tems of the grace period and forbearance you are off on your statements. The lender is paying for the interest accrual on your subsidized federal loans during that 6 month window after you graduate. When you consolidate while in school you lose that grace period how ever they are creating an effective grace period by having the lender pay for the interest during those 6 months. No other lender i know of will do that. End result no difference to the borrower. It is as if you still had your grace period. Nothing has changed in relation to economic hardship deferment or any eligibility to forbearances.

Also in regards to your percentages, you are slight off on those as well. I spoke with one of their analysts about the percentages you wrote of. First off Graduate Leverage gets no where near a 2-5% fee. Secondly the margins that lender hash to work with themselves starts out somewhere in the 8-10% range. That is why it is very attractive to the lenders to get graduate leverage business. If the lenders marketed on their own maybe they could close less than 5% of the Graduate Leverage client base. The lender makes up for smaller profit margins by increasing their volume. End result lender gets more profits, students gets cheaper loans, and Graduate Leverage gets a fee from the lender. Everybody is better off.

Additionally, the reason why T.H.E borrowers recieve their benefits on such a high percentage is because they dont have a 1% reduction for on time payments. Its hard to lose something if you can never obtain something.
 
MedMan2005 said:
I First off Graduate Leverage gets no where near a 2-5% fee. Secondly the margins that lender hash to work with themselves starts out somewhere in the 8-10% range.
.
Click to expand...

I'll tell you right now that they are getting at minimum 2% and the kickback depends on the size of the loans. They "Specialize" in Professional debt (By the way if you ever watched the separate video tutorials for Law,Dental, and Med they are exactly the same!!! More excellent marketing; Which med student is going to see what is going on with law students(?), yet each group feels that their individual needs are being taken care of) which lends to a minimum average debt upwards of 120,000. The actual number is probably closer to 3%
 
Where are you getting minimum of 2% from? And how do you know all of this?

magicrat said:
I'll tell you right now that they are getting at minimum 2% and the kickback depends on the size of the loans. They "Specialize" in Professional debt (By the way if you ever watched the separate video tutorials for Law,Dental, and Med they are exactly the same!!! More excellent marketing; Which med student is going to see what is going on with law students(?), yet each group feels that their individual needs are being taken care of) which lends to a minimum average debt upwards of 120,000. The actual number is probably closer to 3%
Click to expand...
 
Bottom line- I could really even care less how much they get paid. I will be saving money compared to other lenders.

Instead of just pointing fingers you might as well just call them and ask them the questions you have. They are very open and educated reps from my experience.. much better than some of the outsourced call agents from other lenders

I have no idea how you know so much about Graduate Leverage and how much money they make. And Why spend so much time researching another company if you think they are not realiable. Just pick up your loans and go with another company. Your probably just from another lender, because you seem to know a lot more than the average person, trying to bad mouth competition.

This is over my head in terms of all these numbers. My advice, if it matters, is call and talk to their call reps if you have questions.
 
You all forget that when you consolidate federal school loans the government subsidizes these loans. Therefore, these companies can afford to give you a rate of 1.85% or whatever, because the government is picking up the tab on the remainder of the interest to get the market rate. That is why the feds are changing the consolidation process to eliminate fixed rate consolidations, in favor of variable rates.

You must all be in the healthcare field ;)

disclaimer: I am a lawyer with an MBA.
 
In terms of graduate leverage, I used them to consolidate my law school federal loans and also just did a private loan consolidation through them. Both loans were funded by AES, the huge student loan lender with the 30+ year history. I locked in the 75k in fed loans at the 2.85% with benefits to drop 1% for ontime payments and .25% for direct deposit. This was guaranteed in writing. Also, they consolidated my Access Group private loans (32k) with Express Loans (a division of AES) at a higher variable rate (7.5% currently), but they also extended my payments for 30 years. A few of my Access loans were a tad lower int. rate, but some were higher around 8.2%. They reduced my Access Group private loan payment of $428/month to $213.00. This works great for me as my spouse is currently an intern in a "lifestyle" specialty. We need the lowest payments as possible for the next few years then we plan to pay off our private loans.

My spouse consolidated with Sallie Mae. I recommend consolidating with whom you feel comfortable. I think our arrangement is good because we don't have all of our loans with one lender.

Good luck!
 
MedMan and anyone else who has re-consolidated with GL this year,

When you filled out the application and gave an electronic signature, did it include the interest rate (2.875%) anywhere in the document? (I know it shows your estimated monthly payments when you select either standard or graduated payments, but are these guarantees or just estimates?) I started filling out the application, but in the end when it asked me to review everything, I didn't see any guarantees about interest rates, benefits etc?

Thanks for everyone's useful comments, good luck.
 
medman

I said they have a good product. However, the ends don't justify the means...why not state the strengths of the product. I noticed you had no response to the statement I took from GL's website explaining further what they mean by "recommend."

as for how much they make;

Take a 130,000 at 2.875% and 30,000 at 4.7% and don't consolidate it. Total cost of the loans according to consolidationcomparison.com is $187,394.

Let's say you consolidate and receive an apr with all the benefits of 2.35%, total cost of loan is now $225,446 a differnce of $38,052 or %23.7 of the original 160,000 But you talked to a rep and he sounded honest and helpful so there is no way they are making anywhere near 2-5%

I do remember our first years of school chock full of math courses
 
magicrat,

i'm a little confused by the comparison from cosolidationcomparison.com. if in the first example you didn't consolidate, those interest rates won't be fixed (at least not for the $30,000, assuming the $130,000 was consolidated), so could you know how much it's going to cost (chances are the interest rate for the unfixed 4.6% is going to be higher)? also, inflation would erode some of that difference.

and i think you're comparing a 10 year repayment for a non-consolidated loan (in which case the interest rates would change, especially the 2.875%) with a 30 year repayment for the consolidated. if you chose to pay the consolidated loan over 10 years you'd save, but there wouldn't be much of an incentive to with such a low interest rate.

but your point about how they stand to make money is a good one. from our perspective, clearly the consolidated loan is better. and for a given interest rate, the lender makes more the longer you take to pay it off (unless inflation was higher than the interest rate?)

btw, that website is pretty handy, thanks
 
It is all about the additional years' interest. I was making an all things being equal comparison. Remember that the Feds guarantee the loan so it really is a fixed rate for the lender
 
Let me preface this by saying that I am a 4th year medical student with very little business experience and certainly no MBA.
Although I agree that there is no such thing as a free lunch, debating whether graduate leverage (GL) can actually deliver what they advertise is a little bit like a loan officer walking into the ED and trying to figure out why someone has shortness of breath (just wait until you have to shop for a mortgage). My main concerns with GL are (1) that their language is vague and they may screw me over with buyer benefits, leaving me to pay an interest rate of 3.375 for 30 years or (2) that the loan financing agent has such a thin profit margin and very little equity that they might actually go bankrupt (I guess that is the right term) and be forced to sell my loan on the secondary market at the prevailing interest rate.
 
So I really don't have anything new to add, but I thought maybe I could define the problem a little better. I currently have a consolidation loan for $122000 at 2.875%, a subsidized stafford for $8500 at 4.7%, and an unsub stafford for $30000 at 4.7%. I used the amortization spreadsheet in excel and a little knowledge of compound interest to compare GL with AES given my future consolidation amount of $160500.

If I understand GL's "recommendation" correctly, my loan would work in the following way. I would take 3 years of economic hardship deferrment during residency at a rate of 3.375 (weighted avg of my separate rates rounded to the next 1/8%), then I would receive a rate of 2.875 after signing up for autodebit and making payments. After 3 years of ontime payments at 2.875, my rate would drop to 1.875 and remain there for the next 24 years. Assuming I hold my loan for the full 30 years, and make ontime the payments shown on the amortization spreadsheet in excel (comparable but not identical to those calculated by the department of education website), I would pay interest in the neighborhood of $67000 over the 30 years of my loan.

Using the same assumptions for AES: 3 yrs economic hardship at 3.375 followed by 3 years at 3.125 (0.25% reduction for autodebit) followed by 24 years at 2.125 (1% reduction for 36 ontime payments), I would pay interest of about $80700 over the 30 years of my loan with AES. I pay about $13700 more over 30 years with AES than with GL.

Lets say I get to the end of my economic hardship deferrment with GL only to discover that they have found a way out of the supposed contractual obligation to provide me with a 1.5% interest rate reduction (3.375-1.875). I then make payments for 30 yrs at a rate of 3.375%, and I end up paying interest totalling about $104500 over 30 years. That's about $23800 more than the supposedly reliable AES cost and $37500 more than I was expecting to pay. In the admittedly unlikely event that GL's financial backing goes sour, I could end up paying a lot more.

I think my loans are typical of many graduating 4th year students, so I hope I put the Graduate Leverage deal in some perspective. If you want more detailed methodology, I would be happy to provide it. However, I can't guarantee it's accuracy. I can say that I called several companies before doing the calculations myself, and GL made it sound as though I would save $30000 with their plan. That does not hold true according to my calculations. Even compounding $160500 yearly at 0.25% (the rate difference between AES and GL) only results in $12000 worth of interest and that's without making payments (amortizing).

In my opinion, it all depends on how much risk you believe there really is and, in my case, how much you value an extra $13700 over 30 years. Keep in mind that 3 years from now, most of us will work for about 2 weeks to 2 months to cover that amount . . . if you really think the risk is excessive, work through a vacation or moonlight a few nights in the next 30 years. If you don't think the risk is excessive, have fun with the extra money. Either way, both are amazing deals historically, but I don't think I am going to sweat my decision so much anymore. Sorry for the length, hope this was helpful.
 
Any new issues/concerns with Graduate Leverage. I am about to sign the application!

Thanks ppl, enjoyed all the different views!!!
 
You must log in or register to reply here.

Similar threads

apr27
Locums after graduation - PSLF?
Replies
1
Views
489
RangerBob
RangerBob
Y
CARES Act - To consolidate or not?
Replies
20
Views
5K
TMP-SMX
TMP-SMX
R
Loan consolidation - Perkins loans?
Replies
6
Views
2K
RangerBob
RangerBob
B
Perkins Loans Consolidation
Replies
5
Views
2K
RangerBob
RangerBob
K
Any Reason For Me To Consolidate My Student Loans? Details In Text Below.
Replies
2
Views
2K
TMP-SMX
TMP-SMX
Top