Welcome to the MacNN Forums.

If this is your first visit, be sure to check out the FAQ by clicking the link above. You may have to register before you can post: click the register link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below.

You are here: MacNN Forums > Community > MacNN Lounge > STUDENT LOANS: July interest rate increase!

STUDENT LOANS: July interest rate increase!
Thread Tools
Apple Pro Underwear
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 21, 2005, 06:59 PM
 
Have you post graduates received the letter in t he mail?

It looks like the Govt i raising the rates to 5.07% on 7.1.05. So My bank is telling me to consolodate and get a fixed rate lower than 5%. (they are claiming it to be much much less but i doubt it as my rate is already like 3.5 or something)

http://studentloan.citibank.com/slcsite/fr_r_con.htm


whats the scam? please tell me...
     
Oneota
Professional Poster
Join Date: May 2000
Location: Urbandale, IA
Status: Offline
Reply With Quote
May 21, 2005, 08:31 PM
 
So, if you've only got one loan, does it make any sense to consolidate? I just did the Stafford loan (I think) while in college, and haven't given consolidation much thought. But then, I guess I'm not sure if my interest rate is variable or fixed. I'm pretty sure it's not going to change on me, but I could be wrong.
"Yields a falsehood when preceded by its quotation" yields a falsehood when preceded by its quotation.
     
TheIceMan
Mac Elite
Join Date: Dec 2002
Location: Trapped in the depths of my mind
Status: Offline
Reply With Quote
May 21, 2005, 08:34 PM
 
I consolidated mine a few years back. It was to prevent things like this from happening. Although I didn't really save that much on interest. I think mine is 4.375% locked for the life of the loan.
     
Apple Pro Underwear  (op)
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 21, 2005, 08:34 PM
 
i really only make one payment to my one bank

within the bank, i have a loan for each year of school. i think they are saying consolidate those 4 seperate loans into one big loan.

i think they are saying if i do that they will lock it in under that 5%.

i think...
     
TheIceMan
Mac Elite
Join Date: Dec 2002
Location: Trapped in the depths of my mind
Status: Offline
Reply With Quote
May 21, 2005, 08:36 PM
 
Oneota: I think in order to consolidate, you need more than 1 loan. Could be wrong, but I think that's how it works.
     
TheIceMan
Mac Elite
Join Date: Dec 2002
Location: Trapped in the depths of my mind
Status: Offline
Reply With Quote
May 21, 2005, 08:38 PM
 
Apple: That's correct. In your case, all of your loans came from 1 bank. In my case, my 3 loans came from 3 different banks and of course at 3 different rates, so consolidating them lowered my interest rate.
     
TheIceMan
Mac Elite
Join Date: Dec 2002
Location: Trapped in the depths of my mind
Status: Offline
Reply With Quote
May 21, 2005, 08:40 PM
 
I thought I owed alot, but one of my friends owe $200,000 after college and law school!
     
Oneota
Professional Poster
Join Date: May 2000
Location: Urbandale, IA
Status: Offline
Reply With Quote
May 21, 2005, 08:43 PM
 
So I just checked, and I have a bunch of FSA Direct loans (one from each Semester, basically). So they're all from one lender, and I'm paying them back as though they were one loan, but technically, there's 8 of 'em. Does it make any sense for me to consolidate?
"Yields a falsehood when preceded by its quotation" yields a falsehood when preceded by its quotation.
     
kikkoman
Senior User
Join Date: Nov 2002
Status: Offline
Reply With Quote
May 21, 2005, 10:04 PM
 
i will be finished paying my student loans in six months. yay!
     
TailsToo
Mac Elite
Join Date: Jun 2004
Location: Westside Island
Status: Offline
Reply With Quote
May 21, 2005, 10:15 PM
 
Where did you hear about the increase? I've had no notice (but then I'm already in the home stretch of my masters
     
Apple Pro Underwear  (op)
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 21, 2005, 10:30 PM
 
Originally Posted by Oneota
So I just checked, and I have a bunch of FSA Direct loans (one from each Semester, basically). So they're all from one lender, and I'm paying them back as though they were one loan, but technically, there's 8 of 'em. Does it make any sense for me to consolidate?
you're in the same boat as me. CAN ANYBODY answer this question?

i figure if the rate "locks" me in at the current number or lowers... then it works.

Where did you hear about the increase? I've had no notice (but then I'm already in the home stretch of my masters
i got a first notice a month back and then a second notice last week. it's an official notice from my bank. my bank is citibank and it actally says "US GOVT is expected to increase..."

i will be finished paying my student loans in six months. yay!
i could have paid off my loans but i chose to just manage it. the interest rates were super low at 3 something. my loans totalled only 12 grand or so. i decided i would rather have a stockpile of cash to use on a mortage or something.
     
TheIceMan
Mac Elite
Join Date: Dec 2002
Location: Trapped in the depths of my mind
Status: Offline
Reply With Quote
May 21, 2005, 10:51 PM
 
Originally Posted by Oneota
So I just checked, and I have a bunch of FSA Direct loans (one from each Semester, basically). So they're all from one lender, and I'm paying them back as though they were one loan, but technically, there's 8 of 'em. Does it make any sense for me to consolidate?
Apple and Oneota: If you have many loans, then I would consolidate them into one.
     
Xeo
Moderator Emeritus
Join Date: Mar 2001
Location: Austin, MN, USA
Status: Offline
Reply With Quote
May 22, 2005, 12:32 AM
 
I was contacting a consolidation place a while back and the lady told me that this was happening. I never did get around to finalizing the paperwork 'cause I had forgotten. I better get to it!
     
ghporter
Administrator
Join Date: Apr 2001
Location: San Antonio TX USA
Status: Offline
Reply With Quote
May 22, 2005, 01:31 PM
 
I don't see anything on Sallie Mae's page about new rates, at least for Stafford or Perkins loans. The rate for Perkins loans is 5% for the life of the loan... maybe the bank is implying something that's not true?

Glenn -----OTR/L, MOT, Tx
     
Apple Pro Underwear  (op)
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 22, 2005, 01:36 PM
 
I should have googled this mofo from the start:

http://studentloan.citibank.com/mbslcsite?op=lncurat


Citibank states the rates will be reset on July 1st, 2005. In the literature they sent me that I have in my hands literally right now: it states 5.07%.

My current and the currert for everybody is 3.37%.
     
ghporter
Administrator
Join Date: Apr 2001
Location: San Antonio TX USA
Status: Offline
Reply With Quote
May 22, 2005, 07:01 PM
 
Yeah, even if you trust your bank, always check when they say "the federal government" is going to do anything. The May 19 rate for 91 day T-Bills was 2.859%, so the new rates based on that would be 4.559% and 5.159% for grace and in school periods, and for repayment periods respectively. The last time the T-Bill rate was low enough to give a rate of 5.07 was March 3, so they must have based it on the last quarter's rate.

My loan started out at 8+%! It went a lot lower, but that first few years was nasty. I paid it off to get it off my back and to get Sallie Mae to stop sending me credit card offers.

Great way to add hype to a subject, huh? "The feds are raising your rate!" Thanks guys!

Glenn -----OTR/L, MOT, Tx
     
MilkmanDan
Mac Elite
Join Date: Jul 2002
Location: My Powerbook, in Japan!
Status: Offline
Reply With Quote
May 22, 2005, 08:13 PM
 
I just figured out that I have about $17,000 in student loans from 4 years of college. Super scary. I plan to pay it back ASAP. I hate having deb hanging over my head. If I'm lucky I can do that in the next 5 years.
     
Apple Pro Underwear  (op)
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 22, 2005, 09:02 PM
 
Originally Posted by MilkmanDan
I just figured out that I have about $17,000 in student loans from 4 years of college. Super scary. I plan to pay it back ASAP. I hate having deb hanging over my head. If I'm lucky I can do that in the next 5 years.
milkdude:

since my 3.37% was pretty low and my total after college was 12,000 or so. i chose to make my minimum payment rounded up to pay principal every month. it was something like 120 (minimum) and 80 (principal).

i did this to save money. and it works well for me as I am trying to stockpile some money to do something important with it. so managing your loan is an option in itself.
     
Demonhood
Administrator
Join Date: Mar 2000
Location: Land of the Easily Amused
Status: Offline
Reply With Quote
May 23, 2005, 12:42 AM
 
like APU said, if you have a low interest rate, might as well take your time (unless you suddenly become independently wealthy right after college).

and the rate changes every July, btw.
     
Apple Pro Underwear  (op)
Addicted to MacNN
Join Date: Sep 2001
Location: NYC*Crooklyn
Status: Offline
Reply With Quote
May 23, 2005, 06:59 AM
 
Originally Posted by Demonhood
like APU said, if you have a low interest rate, might as well take your time (unless you suddenly become independently wealthy right after college).

and the rate changes every July, btw.

you're right!!!

but hold up... my original rate out of college was 3.10% and then last july raised it to 3.12%

why are they claiming it will go up so much next July?!
     
passmaster16
Senior User
Join Date: Aug 2002
Location: Pittsburgh, PA, USA
Status: Offline
Reply With Quote
May 23, 2005, 02:53 PM
 
My recommendation is to lock in the current rate 3.37% as others have mentioned. The key thing to remember with consolidation is that when you consolidate your loan or loans, those existing loans are paid off and a new, single loan is generated. This new loan is usually a longer loan term with a lower monthly payment. For example, your current loans might be 10 year term with variable interest. By consolidating, you fix the interest rate at the current % and usually extend the loan term (usually by 10-15 years). If you do this, I would strongly advise you to pay MORE than the minimum payment per month or else you will pay MORE interest. This is how the banks make money, they can take your payment per month from $250 to $150 but you have to realize that you might be paying that $150 for double the amount of time. There is no penalty for paying more per month on a student loan. Even if you can only pay $10-20 more each month, do it, you will pay the loan off faster and not have to pay as much interest. Remember you can only consolidate once, so your best case scenario is to take advantage of the low rate now since it is very unlikely that you will be able to lock in a rate any lower. I know people that consolidated at 8% years ago and they are not happy that they can't reconsolidate at these 3-4% rates.
     
milhous
Mac Elite
Join Date: Sep 2000
Location: Millersville, PA
Status: Offline
Reply With Quote
May 23, 2005, 04:07 PM
 
like others have said, get the paperwork in before july 1. here's a reuters article that was sent to me by our college about consolidation:

http://www.reuters.com/newsArticle.j...toryID=8353816

The Low-Down on Student Loans
Sun May 1, 2005 11:13 AM ET

By Linda Stern
WASHINGTON (Reuters) - College graduates this spring have an extra reason to toss those mortarboards gleefully into the air. They will be able to repay their loans with the lowest interest rates in recent years.

But they'll have to act fast.

Newly graduating students who apply to consolidate those loans before July 1 will be able to lock in a rate of 2.88 percent, and some lenders offer incentives that could lower that even more.

On July 1, rates will change, and they could go as high as 5 percent.

"Students need to realize that they must act quickly this year" said Mary Montiel of Collegiate Funding, a San Diego student lending company (http://www.collegiatefunding.com).

Borrowers who have been out of school for more than six months can consolidate and reap low rates, too. They will face a slightly higher rate of 3.38 percent if they sign up before July 1, because they've already missed out on the extra 0.5 percentage point break that new graduates get.

Those rising rates are reason enough to lock in those loans now, but there is another: Congress is set to fiddle with the student loan program and it is possible that the whole fixed rate re-fi will go out the window by the time it is done.

Here's what you need to know now.

-- The savings are significant. Consolidating a $20,000 student debt can save you at least $81 a month, and that's likely to improve in the years to come. The more you've borrowed, the more you can save and the longer you can stretch out your repayments. Check the calculator at Student Loan Consolidator (http://studentloanconsolidator.com) or the chart at Sallie Mae (http://salliemae.com), two lenders that offer consolidation loans.

-- Act quickly. If you don't get your paperwork started before July 1, you're out of luck.

-- Most lenders offer even better deals than the 2.88 percent rate, which is a base. They'll take away another 0.25 percentage points if you agree to make your payments by electronic transfer from your checking account. Then, if you make every payment on time for three years (and that's pretty easy to do if your payments are automatic), they'll slice another whole percentage point off your rate. Within three years you could be looking at a long-term loan with a locked in rate of 1.6 percent. It's hard to imagine a 2008 economy in which that wouldn't look terrific.

-- Your school's financial aid office can recommend some lenders, and you can shop online at a host of student loan sites, including those mentioned elsewhere in this column. The Education Department also offers direct consolidation loans at http://loanconsolidation.ed.gov. If all of your loans already are with the same lender, you'll be required to use that lender for your consolidation loan.

Look for lenders that offer all of those price breaks as well as easy service, and repayment options like stretched out terms and low initial payments (for while you're job hunting). But don't knock yourself out comparison shopping; many of the terms and conditions of student loans are set by law and regulation, they don't vary all that much from lender to lender.

-- Follow the exact steps that your new lender gives you. For example, if you've already been having your payments deducted from your checking account, you might have to re-enroll to get that 0.25 percentage point credit.

-- Parents can consolidate PLUS loans too. Their rates are higher -- 4.75 percent -- but that's still a good deal to lock in now, as those rates will rise on July 1, too.

Once you've nailed your new loan, you can start job hunting. Tell prospective employers that you were smart enough to save hundreds -- or thousands -- on your college loans and that you'll put the same savvy to work for them.
F = ma
     
olePigeon
Clinically Insane
Join Date: Dec 1999
Status: Offline
Reply With Quote
May 23, 2005, 04:53 PM
 
No loans... yet. But then again, I'm going to crappy schools.
"…I contend that we are both atheists. I just believe in one fewer god than
you do. When you understand why you dismiss all the other possible gods,
you will understand why I dismiss yours." - Stephen F. Roberts
     
   
Thread Tools
 
Forum Links
Forum Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Top
Privacy Policy
All times are GMT -4. The time now is 04:43 PM.
All contents of these forums © 1995-2017 MacNN. All rights reserved.
Branding + Design: www.gesamtbild.com
vBulletin v.3.8.8 © 2000-2017, Jelsoft Enterprises Ltd.,