Seeing as how there are a lot of student loan discussions on FW already but none dedicated to discussing strategies for minimizing your interest rate, payments, etc while you are IN SCHOOL - I thought it might be good to start one. First off, here are the worthwhile links out there already:

Consolidation:

1. UHEAA Consolidation Topic link
- NOW AN EVEN NEWER UPDATE!!! I am beginning to feel jerked around by UHEAA. They now have changed the program for NEW loans also, not just consolidation. There terms are now .5% reduction for auto-debit and 1 % after 36 months. Their website is WRONG. Call and ask. So, not so great a deal anymore.

2. Getting around the single lender rule Link

3. Master Consolidation Thread Link

4. New Thread on Consolidation Rates after UHEAA has changed its accounts: Link

These all have good info in them.

Ive done a lot of research lately and here is what I have found that is pertinent to in school students:


Part 1: In School Consolidation:
1. Can I consolidate in school?
Yes, you can consolidate in school. The single lender rule applies (see thread above for strategies for getting around that) but becuase you are still in school, you have more flexibility on taking out a new loan if your school will let you.

2. Should I consolidate?
Yes, at least for the 05-06 year. You should consolidate any current loan you have before the new laws Link come into affect. Right now, Stafford Loans are variable at 4.7% in school, next year they will be 6.8% and fixed (Im not sure if the rate will rise in repayment, if anybody knows, please post). So, you should take out as much loan money as you can THIS year at the 4.7% and consolidate it at that rate.

3. How do I consolidate while still in school?
It is easiest if you have two different loan companies. If you have any money left over for this year, go to your financial aid office and try to get a new loan at a DIFFERENT company. Try to get it with the place you want to consolidate with, but if you dont have time, then get any loan. The company you want to work with will then do it.

Also, when you consolidate, you will have to have your loans put into "repayment status". This means your rates will bump up to 5.3%. MAKE SURE THEY DONT CONSILDATE AT THIS RATE!!! Instead, make sure they are willing to put you into "deferrment" status and THEN consolidate with them. It is a hoop that you must jump through. So, when calling a prospective lender, MAKE SURE THEY WILL DO THIS!!!

If you dont have two lenders, see the "single lender" thread above to try to get your loans moved to a new company. Some companies will do it without any hassle, so call your current company and check. If you dont have time to do this to move to one of the companies listed below, then just consolidate with the company you have. It will be better to lock in a low rate with not as good borrower benefits than to keep the variable rate loans.

4. Where should I consolidate?
1. Not so sure anymore after the UHEAA changes...
2. See the other loan consolidation threads for good lenders.

For useful link on in-school consolidation info, see Sallie Mae in School Consolidation Info

For letter to send to current lenders when you want to consolidate your loans with another company while in school, see Move Loan to "Repayment" and then "In school deferrment" Letter

Part 2: What strategies should I use for my future loans?

1. Where should I get my next loan?
This is a good question. It all has to do with orignation fees and borrower benefits. I think a big part of this thread should be to talk about this. All the programs offer different benefits and you need to run the calculations yourslef. Some with big % off the loan will be good for large borrowers, but other programs may be better if you have a small loan. So, Ill try to compile some of the best below.

THE - Northstar
These guys have a neat loan calculator. Notice, however, that they dont include UHEAA's 3.25% rate reduction after 48 payments. You will have to go to UHEAA's website for that. If anybody has any experience with these guys, or if the calculator shows this is a better deal than UHEAA, we'd love to hear about it.

Northstar Borrower Benefit Calculator

Id like this to be a place where we can complile a list of the best rates out there for new, in-school loans. Please post if you know any good ones.

***2/16 - Updated structure and added Northstar as a possible lender
***2/21 - Added links to Sallie Mae In-school consolidation website and letter

Is UHEAA really better than Northstar?

Interesting. So I assume you included the 1% timely payment reduction after 48 months with UHEAA + the 1.25% reduction for direct withdrawal payments and then the 0.75% reduction offered by Northstar?

Bycracky said:Interesting. So I assume you included the 1% timely payment reduction after 48 months with UHEAA + the 1.25% reduction for direct withdrawal payments and then the 0.75% reduction offered by Northstar?

I actually just used the calculators. If you dont CONSOLIDATE the loans, UHEAA is actually offering 2% off + 1.25% for DW. Total is then 3.25%.

Hope that helped clarify what numbers I ran.

andrey0 said:How long does the consolidation process take?

I need to consolidate with the federal goverment and then with UHEAA. The rates spike on july 1st. I guess, I better start the process right now. But, repayment will begin 60 days after I submit the application, maybe it's better to hold off?

Also if I consolidate with federal while in grace, will I get the 4.7% grace/indefferment/inschool rate? All of my loans are at 4.7% right now.

I got this off of Direct Loans website:
"How long does it take to consolidate my loans once I submit my application?

The consolidation process generally takes 30-45 days. Using our online Web application can reduce the amount of time it takes to consolidate a borrower's loan."

Also, on getting the lower interest rate (4.7) consolidated with them:
"Lower Interest Rate For In-School and In-Grace Consolidation. A borrower who has a Direct Loan or an FFEL in an in-school or grace period at the time a consolidation application is received, may benefit from a lower fixed interest rate on the new Direct Consolidation Loan. The difference between your interest rate during an in-school and/or grace period, and during a repayment period, can be as high as 0.6 percentage points. In-school consolidation is available only with Direct Consolidation Loans."


As for repayment status, you should have plenty of time to consolidate with Direct Loans and lock in your 4.7%. Once youve done that, the extreme pressure is off. You just then need to reconsolidate with UHEAA. The only problem is that the longer UHEAA takes, the closer you will get to having to actually make a payment. I would call both companies to see how it would work. You cant ask for "deferrment" status with Direct Loans if you want to reconsolidate, because then UHEAA would ask you right away again to put them back into "repayment" status...a lot of hassle. Might as do both consolidations right away without switching back and forth each time. Hopefuly you can get it all done without having to make a payment.

Finally, check your own lenders Borrowers Benefits. I had Sallie MAe and they only give 1.25% off the interest rate, not 2.25% like UHEAA. My friend, however, had a loan with cfnc.org (College Fund of North Carolina) and they had as good of plan as UHEAA, so he just consolidated with them.

oopsz said:Okay, I'm going into grad school in the fall, having come out of undergrad debt-free.

Unfortunately, because I didn't deal with student loans in my undergrad, I have no idea how they work. The university I'm most likely headed to isn't a direct lend school, and though they have a few banks listed on their financial aid site, they don't specifically recommend any one over another.

So.. Could I take my initial loan from UHEAA? I'm not from or going to school in utah.. Anyone else I should look to? What would you do, if you could start from the beginning?

I would call UHEAA and ask. I called them a while back and they told me that if I didnt have any loans with anybody else, I could use them. I would call and ask, they are very friendly. Make sure to tell them that your school isnt a Direct Loan school, but I dont think that will matter. Post back here with their response.

Finally, I would recommend reading the UHEAA loan thread even though you are not consolidating. It helps get the lay of the land. There really is no reason for you to go through Direct Loans that I can see...you really just need to find the best borrower benefits for next year with the rates being fixed. Consolidation is losing its luster.

Is it really possible to consolidate directly with UHEAA while I'm still in-school?

I called UHEAA - and they said no. They said that they only did in-school consolidations last year starting in June, for about 1 month before the rates ticked up. The lady I spoke with did not know if they would do in-school consolidations again this year.

I think I can consolidate with Direct Loans while still in-school. Has anyone done this?

I have 2 $8,500 loans with Citi that I'd like to eventually get to UHEAA. I also have an existing consolidation loan with UHEAA (from undergrad).

My plan to get to UHEAA is to consolidate with Direct Loans immediately, then move the loan to UHEAA. Will this work if I'm still in-school, or do I have to wait until I graduate and my consolidated loan at Direct goes into repayment, in order to then consolidate it with UHEAA?

Ultimately, I want to get the current 4.7% rate fixed on my loans. Ideally, I would get it fixed and get the loans over to UHEAA.

Any thoughts?

remember if you consolidate with your wife and something happens to one of you, the other person will *still* have to pay off the loan. It's an unlikely scenario, but one that should be planned for.

It might be worth it to jump through hoops for the lower rate. But factor in the cost of insurance. I have heard of widows/widowers stuck with their former spouses loans because they didn't realize what could happen.

My biggest problem right now is that my wifes medical school is hassling us about choosing UHEAA for next year's loans. They said they had problems with them in the past. Does anybody know if I have a right to pick the guarantor of my loan and not just my lender? That would be good information to have. They told me we can pick our lender, but they get to pick who guarantees it, and they do not with to work with UHEAA.

Any ideas?