Turtleman,

I am wondering if you will be able to consolidate the 2k WF loan on its own. I think there is a minimum amount requirement. If thats the case, you have two options.

1. do as you said. Consolidate the direct loans with UHEAA now. After the UHEAA consolidation is complete, the single lender rule will no longer apply because you will have FFELP loans with two separate banks. You can then add the WF loan to the UHEAA consolidation. However, the WF add on will be after July 1, so that 2k will be at a higher rate. The jist of it, and I'm not sure, is that the 2k add on might end up slightly bumping up your rate on the entire loan due to the weighted average formula.

2. Consolidate both the WF and Direct loans with a Direct loan consolidation. You will lock in the low rate on the entire amount. When this consolidation is complete, simply reconsolidate with UHEAA to obtain their benefits. At this point you would have locked in the rate, so it won't matter if this reconsolidation takes place after July 1. Direct loans will always release your loan info to UHEAA so that is not a concern either.

Rath

I have about $17,500 in student loans with Sallie Mae being my only lender. After I researched around on the internet and came across this board, I went to my school to talk to the financial aid guy. I was told that the Dept of Education will be able to consolidate your loan even if you only have one lender. So I called Sallie Mae and asked them if they would release my loan, and they said they would, but only to the Dept of Education for the Direct loan. My question is after I consolidate with the Dept of Edu, could I reconsolidate it again with a different company? I called the Dept of Edu to verify that they would be able to consolidate my loan with Sallie Mae, and I think they said after they get my loan I could consolidate with anyone I wanted to, but I am not sure because I have talked to so many people. Thanks for any information.

April

Rath, thanks for all of your work on this.

My situation:
1) I am subject to Sallie Mae's clutches through the 'single lender' rule.
2) I consolidated with them in early June.
3) My consolidation is still pending because I requested the 6 month grace period when I originally filled out my consolidation request with them.
4) After reading this great forum, I just asked them to waive my 6 month grace period (to finalize the consolidation). Was this a good move? (Too late if it's not okay!)

My action plan:
1) Confirm that the consolidation was completed.
2) Consolidate (online?) with US Dept of Education. How would I list my loans, then, on the application? All of my individual Stafford loans or the total amount I consolidated with SM?
3) Reconsolidate with UHEAA.

The people at UHEAA didn't seem to understand what I meant by 'reconsolidating' with them, fyi.

Thanks in advance for your thoughts on my situation and on my 'action plan'.
ChiefT

Thanks, Rath.

I know that I had the current low rate locked in (2.875%, not including any benefits/discounts), even with my initial request to keep my grace period, but thanks for the reinforcement of my decision to waive the grace period.

Now that my SM consolidation is finalized (received confirmation), I should be able to do the Direct Loans thing. How would I list my current loans on the Direct Loans application?

1) List them as individual loans (Sub & Unsub FFELP), as originally funded?
2) List them as one loan, with the consolidated amount?

Thanks again, Rath.
ChiefT

Is there still time to get this happening before June 30? My wife has one DirectLoan and seven loans through SallieMae. I called UHEEA, and they told me that because my wife was in graduate school, she would not qualify for consolidation. Any ideas?

Rathipon:

First I wanted to thank you for your post and all the help you are providing the forum.

1. As posted above I have $44k in a cosolidated sub/unsub loan through AES(PHEAA) locked at 4.3%.
2. I applied for a Direct Loan consolidation (to eventually get to UHEAA).
3. I received a letter saying I did not qualify for the consolidation with them.
4. One month later (today) I received a letter indicating that my loan would consolidated within 10 days! I called today to verify that everything was A ok - and it was!
5. In about a month or so - I should be able to start the process with UHEAA.

Some notes:
1. My current AES(PHEAA) loans have been in deferment for 6 months after 3 years of payments.
2. I did not have to start a letter writing campaign.
3. I was going to use a UHEAA promisory note to pay for one of my $900 grad classes so I could use that loan as a way around the single lender rule to re-consolidate.
4. The July 1st deadline is a non-issue to people reconsolidating fixed loans.

Do lenders automatically STOP chargin interest when you hit the 10% cap noted above? Or do you have to advocate for it?

Rathipon said:When you refer to a 10% cap, are you talking about interest that accruses with the income contingent repayment plan?
Yes, that is what I was referring to. I read more about it here: http://www.ed.gov/offices/OSFAP/DirectLoan/RepayCalc/dlindex2.html in the link from above, and I was unaware what ICR meant. I don't qualify for that.

I think you just had bad luck with your UHEAA CSR. I would call back. You should not have any problems whatsoever moving your loans from Direct to UHEAA.

Rathipon

Glad to hear it ddee06.

By the way, the deadline your referring to applied only to loans that had not yet been consolidated. Loans consolidated loan can be moved from the current lender to direct loans without any impact on the interest rate. They can then be moved to UHEAA so that borrower benefits can lower the rate by up to 2.25%.

Rathipon

It looks like among other things, they're talking about getting rid of the single lender rule. To that extent, I am pleased.


Another new point from the proposal: Students who had received all their loans through one lender would be allowed to shop around when they decide to consolidate. As it is now, only students who borrow from more than one lender -- or took all their loans from the Department of Education direct loan program -- have that privilege.

It would be interesting to see if this change is retroactive. I am guessing it won't be. Also, it probably will not apply to loans that are already consolidated. The great thing about the method outlined in the original post is that anyone who has student loans, either consolidated or not consolidated, even those consolidated many years ago, can take advantage of it. To that extent, it is retroactive in nature. I cannot really say how these proposed changes would impact the feasibility of the method, however.