write a letter back saying you are suspending payments due to ongoing disruption in the global credit markets.

Graduate leverage did the same thing last fall when the feds reduced the amount of money they were going to make. So instead of 5.8% with the 1% discount, I'll be paying the full 6.8% interest rate on my graduate student loan.

Fascinating. I am due to have my 2.625% 30k loan drop 1% for 30 on-time payments this June. I wonder if I'll have to fight to get it. Either way I'm dragging this thing out forever because it's a wonderful hedge against rapid inflation; so glad I made a fixed-rate consolidation in 2005.

These private loan companies are all scum. They're cutting the bonus because the feds decreased the free money they were giving them. If your loans are federal, stafford loans or grad plus loans are the typical ones, get into direct loans. You can consolidate into them if you got your federal loans from a third party.

I know it may be too late, but NEVER EVER take private student loans of any sort. If you're in an overpriced graduate school, you can always get grad plus loans to meet the difference between staffords and your cost of attendance. Private loans are terrible. They offer none of the benefits of federal loans but they are just as non-dischargeable.

Have you heard about the college cost reduction act? There are very significant benefits intended to encourage people to get into direct loans. Starting next year you will be able to sign up for an income based repayment plan that could greatly reduce your payments for federal loans. You will also be able to cancel the remainder of your balance after a certain number of years. 10 if you work in a public interest or governemnt job and 25 if you don't.

finaid.org is a great resource to learn about this stuff.

I'm in the same boat. Given that this happened to my consolidation loan, does anyone have any advice on what I can do? Am I basically SOL due to the fact that I can't re-consolidate an already consolidated federal Stafford loan, since I have no new loan to add to the consolidation mix, and consolidation rules require at least two loans to reconsolidate a consolidation loan?

munster8 said:I'm in the same boat. Given that this happened to my consolidation loan, does anyone have any advice on what I can do? Am I basically SOL due to the fact that I can't re-consolidate an already consolidated federal Stafford loan, since I have no new loan to add to the consolidation mix, and consolidation rules require at least two loans to reconsolidate a consolidation loan?

Munster8,
Who did you consolidate with? And have they sent you a letter telling you that they were suspending their benefits?

My wife had her medical school loans through T.H.E. but we consolidated with a different company. It looks like that was a very smart choice.

doubtful... read the loan contract

ArbolLoco said:cowboyBill said:ArbolLoco said:ask them to show you where in the loan contract that they have the right to do this.


Here is their explanation.

http://www.northstar.org/undergrad/RepaymentBonus.aspxneed a good link. I was thinking about this thread in the car the other day and it really pissed me off... essentially what they are doing is putting this out there knowing that 99% of the borrowers won't challenge them on this. I don't think they have a legal basis to do this but I will reserve judgment until I see their statement.

You just need to crank up the time machine.
http://web.archive.org/web/20070608195010/www.northstar.org/undergrad/RepaymentBonus.aspx

"The T.H.E. Bonus is treated as a reduction in the interest cost. This amount is based on current financial market conditions and portfolio performance and is therefore subject to change."