I was thinking about consolidation my student loans. The fixed interest rate would be 6.87% I believe. They are in repayment and they are up to date with no derogs or lates ever. My loan servicer is Sallie Mae. I've researched everywhere on trying to get out of them or getting it reduced. But, I don't fit any of the criteria not even for a derferment only forebearance. I had my loan in forebearance but now the principal is more than I borrowed. Do any of the student loan experts have an opinion on this? How about Mozilla? Do you have any insight? Is consolidation a lot better? And what does it do? I called Sallie Mae but the CSR but was no help of course.
Read the Higher Education Act in detail concerning terms, interest rates, etc. The link is http://www4.law.cornell.edu/uscode/20/ch28schIV.html Also go through www.ed.gov and you should find info on consolidation. As far as a reduction, you can settle these but only for a 5% or 10% reduction, this should also be in the HEA.
Consolidation will give you a weighted avg of all of your loans, and it also depends on when you graduated. I think direct loans from the dept of ed is one of the best (maybe the best ) deal. They will give you a 0.25% reduction of you debit out of checking, but this won't reduce you payment, but accelerate the loan. The 0.8% reduction is immediate, and you will lose it if you dont make the first 12 payments on time.
If you consolidate, they'll extend the term of the loan, and in exchange you get lower monthly payments. However, you'll end up paying a lot more over the life of the loan since because of the longer term, and because you'll have a slightly higher interest rate (since they round up the weighted average of your current loans). As the previous poster noted, there's a discount available for direct debit, but I believe the 0.8% discount ended a few months ago. Would you be able to make the payments under the income contingent repayment plan?
