Loan Consolidation

[4Eyes]

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I have some questions on consolidating. I've been through the financial aid forum here, but it seems to be geared more toward medical school students. The general consensus seems to be that I should indeed consolidate now, while I'm in school.

What are your experiences with consolidating? Was it too terribly scary losing your grace period? How does the whole deferment thing work when we're not med students going into a residency? Or is it often even necessary?

I've also been speaking with the AOA Advantage people, and I'm pretty sure they're the way to go, but if anyone has any advice in this department, that would be great, too.

Thanks!

 

[christie]

I just consolidated my 4th year loans and didn't lose my grace period. I start paying all my loans back in November.

 

[cpw]

I didn't lose my grace period at all. If you shop around you won't.

Call around and find out what the different companies offer. find out if you're eligible for a lowering of your interest rate after so many consecutive payments.

find out the AOA's interest rate.. and then shop around. I found other companies had better rates than the AOA.

As for deferring for residency... you can... but it's probably better to start repaying. Even at a low consolidated interest rate, you're racking up interest FAST on the amount of debt you have by graduation. Always better to start repaying early.

 

[pre-opt]

I am really embarrassed about how ignorant I am about loans. Luckily I didn't take out any loans for undergraduate, but have taken out $20,000 for my 1st year of optometry school. Of the $20,000, $8,500.00 is a subsidized Stafford loan, $7,500.00 is a Health Professions Loan (5%), $1,000.00 is a Perkins Loan (5%), and $3,000.00 is from a local foundation and will always be interest-free. So all of my loans are interest-free while I am in school thus far. Does anyone know if it would be advisable for me to consolidate my loans? Another question that I have is about Stafford subsidized loans. I know that I don't have to pay interest while in school, but what interest rate will I be paying when I am out of school. Is it the interest rate when you took it out (from now...2005/2006) or will it be the rate when I graduate (in 2009)? I am really confused and concerned because there has been so much talk about loan consolidation and the future of school loans. Any advice is appreciated.

 

[4Eyes]

As of now, I'm not planning to do a residency. I just didn't know if deferments were ever necessary if you lose your grace period and you find yourself in a situation where you haven't started your job yet, and you don't know how you'll suddenly start paying it back. (In contrast to all the discussions in the financial aid forum where all the med school students are talking about deferring during their residencies.)

I've heard people talk up AOA like crazy since it's technically not-for-profit...but maybe I'll investigate my other options more thoroughly.

Thanks!

 

[stompy]

I am really embarrassed about how ignorant I am about loans. Luckily I didn't take out any loans for undergraduate, but have taken out $20,000 for my 1st year of optometry school. Of the $20,000, $8,500.00 is a subsidized Stafford loan, $7,500.00 is a Health Professions Loan (5%), $1,000.00 is a Perkins Loan (5%), and $3,000.00 is from a local foundation and will always be interest-free. So all of my loans are interest-free while I am in school thus far. Does anyone know if it would be advisable for me to consolidate my loans? Another question that I have is about Stafford subsidized loans. I know that I don't have to pay interest while in school, but what interest rate will I be paying when I am out of school. Is it the interest rate when you took it out (from now...2005/2006) or will it be the rate when I graduate (in 2009)? I am really confused and concerned because there has been so much talk about loan consolidation and the future of school loans. Any advice is appreciated.

I would "consolidate" your subsidized Stafford loan right now.

You won't regret it.

 

[stompy]

I didn't lose my grace period at all. If you shop around you won't.

Call around and find out what the different companies offer. find out if you're eligible for a lowering of your interest rate after so many consecutive payments.

find out the AOA's interest rate.. and then shop around. I found other companies had better rates than the AOA.

I agree. The key is to shop around like you do for a house, a car, a career, a school.

I was able to get a company to lock in this past year's loans (sub and unsub) at the same rate of my consolidated loan from undergrad (which is at ~2.875%). So for the time being, I have roughly $50k at 2.875% (with the sub and unsub separated of course). The condition is that I'd have to accrue the loans from this past year's loans at 4.7% until I enter repayment.

It pays to do your homework. 👍