loans, consolidation, defferment?

[amyl]

Advertisement - Members don't see this ad

So does anyone have any idea at what rate we are going to be able to consolidate? any recommendations of consolidators? are we going to be able to deffer them during residency? are loan payments tax deductible? thanks in advance, amy

 

[cchoukal]

loans are a bitch... the rates have been going up since I graduated. Your financial aid coordinator can tell you exactly what your rate will be, and the rate changes every June. Deferment means you don't pay interest on the subsidized loans, but you DO pay on the unsubsidized loans. Forebearance means you pay interest on everything. Deferment for economic hardship (what you'll be applying under during residency) is a 1-year term, and you can renew it for a total of 3 years. After that, forebearance is probably your only option.

I have read in other forums that these options are changing and deferment may disappear or be harder to get. Right now, if you are a resident with no other income and have more than a minimum of loan debt, you should easily qualify. If you start moonlighting, however... your story may change. To my knowledge, this type of loan interest is not tax deductible, but I've heard of people rolling their loans into their mortgage, in which case it would be. Seems like a tenuous proposition unless you knew you had other income...

Hope that helps.

 

[thegasman]

loans are a bitch... the rates have been going up since I graduated. Your financial aid coordinator can tell you exactly what your rate will be, and the rate changes every June. Deferment means you don't pay interest on the subsidized loans, but you DO pay on the unsubsidized loans. Forebearance means you pay interest on everything. Deferment for economic hardship (what you'll be applying under during residency) is a 1-year term, and you can renew it for a total of 3 years. After that, forebearance is probably your only option.

I have read in other forums that these options are changing and deferment may disappear or be harder to get. Right now, if you are a resident with no other income and have more than a minimum of loan debt, you should easily qualify. If you start moonlighting, however... your story may change. To my knowledge, this type of loan interest is not tax deductible, but I've heard of people rolling their loans into their mortgage, in which case it would be. Seems like a tenuous proposition unless you knew you had other income...

Hope that helps.

Student loan interest is tax deductible.

 

[lord_jeebus]

I am not sure that there are many good reasons to consolidate now that things have changed from a few years ago.

If you still have variable rate Staffords from 2004-2006, you may be able to lock in a low rate with those; I'm not sure. If you do that you should wait until July 1 of this year at least, when Stafford rates are almost certain to be lower.

 

[coprolalia]

Sallie Mae is satan.

-copro

 

[cchoukal]

I am not sure that there are many good reasons to consolidate now that things have changed from a few years ago.

If you still have variable rate Staffords from 2004-2006, you may be able to lock in a low rate with those; I'm not sure. If you do that you should wait until July 1 of this year at least, when Stafford rates are almost certain to be lower.

Consolidation does 2 things: simpifies the payment into 1 (I had like 4 loans from undergrad, 2 from grad school, and 8 from med school, each which would've had a separate payment/monthly check) and locks in the rate. How important the first thing is depends on how many individual loans you have. How important the second is depends on the trajectory of interest rates. I don't know about your financial aid people, but ours were pretty on top of things and had pretty good forecasts about the likely direction of rate changes from year to year.

 

[cchoukal]

So does anyone have any idea at what rate we are going to be able to consolidate? any recommendations of consolidators?

and I'd go with the gov't for consolidation. I get about 10 calls/mails/emails per week from outside companies promising this or that. They're so aggressive that there HAS to be money in it for them, and that money probably comes from me one way or another. They seem to offer good rates, but if you look hard, there are stiff penalties for late payments and few/no deferal options. It may be that you CAN get a better deal from one of them, but I'd look really hard and ask a lot of questions.

 

[lord_jeebus]

Consolidation does 2 things: simpifies the payment into 1 (I had like 4 loans from undergrad, 2 from grad school, and 8 from med school, each which would've had a separate payment/monthly check) and locks in the rate. How important the first thing is depends on how many individual loans you have. How important the second is depends on the trajectory of interest rates. I don't know about your financial aid people, but ours were pretty on top of things and had pretty good forecasts about the likely direction of rate changes from year to year.

The issue is that variable-rate Staffords have been discontinued (so there's no rate to "lock in" unless you still have old variable-rate loans that were never consolidated) and consolidation takes away your grace period, putting you into economic hardship (and forbearance 3 years hence) 6 months earlier.

 

[lobelsteve]

Student loan interest is tax deductible.

Unless you make over $140k per year, then they are no longer deductable.
Screwed!

 

[Direct Laryngoscopy]

try graduate leverage. Started by some Harvard MBA dudes as a project now due it full time. No charges to you (but they do get "paid" by the loan co. if you accept a loan thru them).
They negotiate lower rates by having a large backing (power in numbers).
I will definitely consolidate next year (imma MS3).
They have come to my school and presented their info and it was quite informative. You can email them and they could possibly come to your school before you graduate and present to your class.

website: http://www.graduateleverage.com/

 

[amyl]

if i have additional income outside of my residents salary will i qualify for deferment?

 

[Ventil8]

Unless you make over $140k per year, then they are no longer deductable.
Screwed!

It appears to be the other way around:

The amount of your student loan interest deduction for 2007 is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $55,000 and $70,000 ($110,000 and $140,000 if you file a joint return). You cannot take a deduction if your MAGI is $70,000 or more ($140,000 or more if you file a joint return). This is an increase from the 2006 limits of $50,000 and $65,000 ($105,000 and $135,000 if filing a joint return).

And here's my source:
http://www.irs.gov/publications/p970/ch04.html

 

[lobelsteve]

It appears to be the other way around:

The amount of your student loan interest deduction for 2007 is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $55,000 and $70,000 ($110,000 and $140,000 if you file a joint return). You cannot take a deduction if your MAGI is $70,000 or more ($140,000 or more if you file a joint return). This is an increase from the 2006 limits of $50,000 and $65,000 ($105,000 and $135,000 if filing a joint return).

And here's my source:
http://www.irs.gov/publications/p970/ch04.html

Kind of the same thing I said....

If you are married filing joint and make over $140k, you have been phased out and cannot take the student loan interest deduction.

More money made = less deductions available. + AMT

 

[Leverage]

if i have additional income outside of my residents salary will i qualify for deferment?

When applying for deferment they will not look at spouse income. Our Financial Aid office told us this yesterday. I also heard you have to apply for it every year. If you can not get deferment you can always get mandatory forbearance. And you can probably keep things in check if you just make payments on the interest of your unsubsidized loans while in forbearance. Not ideal but doable.

 

[pjm]

This calculator uses the new definition of "economic hardship":

http://www.finaid.org/calculators/economichardship.phtml

As of 10/1/07, the old "20/220" definition of hardship was eliminated which makes it harder to claim than before.

Because the Fed has reduced interest rates, I would guess that the variable rates on Fed Staffords from before 6/30/06 will drop after 7/1/08 and you can get a better consolidation loan rate. Talk to your financial aid people to confirm this. (http://www.salliemae.com/get_student_loan/apply_student_loan/interest_rates_fees/#Stafford)