Is my loan servicer cheating me?

[MDhasbeen]

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I graduated from med school back in 2006 when the rates were very low compared to now, so I consolidated and got an interest rate below 4%. As many of you know, most loan servicers offer incentives to make a certain number of consecutive payments to lower your interest rate even further for your good behavior. I had the ability to lower my interest rate to below 3% with 36 consecutive payments.

After I graduated med school, I moved from one state to another for residency. I recalled getting a letter in the mail about how I'd lost said interest rate reduction in the future, but I couldn't recall why.

Recently one of my med school classmate friends contacted me telling me her interest rate was being lowered. I told her I'd lost that ability because of going into economic hardship deferment. She said she'd deferred too and her rate was still being lowered. I was confused.

So I contacted my loan servicer, and they told me that I was technically in default on my loans for 15 days between graduating medical school and starting residency. Well, as an ignorant new medical grad, I do not recall ever being instructed on how to keep my student loans in good standing between graduation and the start of residency when I was technically unemployed. I tried writing them a letter along these lines, but of course they refuse to allow me the future 1% rate reduction. Do I have any grounds for future action? Thanks!

 

[Igor4sugry]

Medical schools as well as residencies do not teach anything about personal finance, debt management, insurance, investments, etc. You are on your own for this.
Since you did not meet criteria for loan rate reduction you don't qualify, no matter what the cause is.

 

[dpmd]

So I contacted my loan servicer, and they told me that I was technically in default on my loans for 15 days between graduating medical school and starting residency. Well, as an ignorant new medical grad, I do not recall ever being instructed on how to keep my student loans in good standing between graduation and the start of residency when I was technically unemployed. I tried writing them a letter along these lines, but of course they refuse to allow me the future 1% rate reduction. Do I have any grounds for future action? Thanks!

You only go into default after a long period of not paying your loan payments and not bothering to contact the servicer. It might be that they told you that you were late by 15 days for one of your payments, which if you had paid any attention to your consolidation paperwork you would have known this was enough to lose your incentive. Either way there are a bunch of places during the application process for the consolidation where you would have seen this requirement for the incentive, not to mention it would have been in the final papers. Plus, I don't think anyone should require any special instruction or training to know that if they owe money for something they need to pay it back on time. The fact that the lenders give us the option to make arrangements to delay those payments is great and it isn't difficult to figure out how to do so if you look at their website, your loan papers, or call their customer service and ask. It is amazing to me how people can claim ignorance about their loans when all of the important details are all available in writing.

 

[Stroganoff]

So I contacted my loan servicer, and they told me that I was technically in default on my loans for 15 days between graduating medical school and starting residency. Well, as an ignorant new medical grad, I do not recall ever being instructed on how to keep my student loans in good standing between graduation and the start of residency when I was technically unemployed.

At first I wondered what happened to the 6 month grace period between med school graduation and residency but realized when you consolidate loans, repayment begins immediately (first payment due within 60 days).