Thread: WHAT!!! Student Loan..

Alright, I am in the midst of consolidating two student loans. One loan is in rehabilitation (USA Funds) ...I started repaying it in November.

I received a letter from Direct Loans stating that USA Funds has not responded to their payoff request. I call USA Funds. They tell me that if I consolidate now, I will not be adhering to my rehabilitation agreeement and I will lose my rehab benefits. She says that if I consolidate my loan will still say it is in default on my credit report (which is weird, because right now, my credit report does not show a defaulted loan at all...both my loans say paid as agrees). She suggests I wait until the 12-14 month rehab period is over before consolidating (which would be early 2004..aaaahhh).

Is that right? I thought once you were in rehab you could consolidate. So if I do, will the collection agency put that my loan back in default although it will be paid off? If it's not on my report as defaulted now, should I go ahead and file for consolidation? Oh I'm so confused...and I have to get back to Direct Loans in a week with my answer.

You need to rehab first. They are correct.

the sound you currently hear is my head pounding against my desk. And I just wonder what the rate will be in January.

I feel your pain, BUT I *will* say that you are lucky as he** with your loans showing 'pays as agreed' when the rehab hasnt completed yet. I would give my first born for that! :)

thanks Brian -I must have I snuck below the gate or something. Well partial success anyway, I talked to Direct Loans, my stafford will still be consolidated and the interest rate will be locked in and once my rehab is complete they can add the other in. I'm confused though if it will be at the same interest rate or not. I was just so happy to have one reduced that I didn't think to ask.

Originally posted by c_indalite
the sound you currently hear is my head pounding against my desk. And I just wonder what the rate will be in January.

I THINK that the rates change only once a year. So if you rehad and consolidate in early 2004, you would get the same rate as you do now. Assuming the variable rate weighted average stays the same. Did I just contradict myself??....

No worries. The rate will not go up until July 1 of 2004.

Try this link, for the explanation of how and when rate is determined.

http://www.dlssonline.com/qctr/qctr-...d=QctrCintA011

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