05.08.09 | Consolidation Benefits Gone
The borrower benefits that once existed in the world of consolidation are now gone. It’s as if Back to the Future’s resident tough guy Biff Tannen told them to make like a tree and leave (although he used to screw that line up). Regardless, those benefits listened and bolted out of down quicker than Bruce Willis’ character in Pulp Fiction. They are now no where to be found. You can turn over as many stones as you like, but all you’ll find is some moist soil and a few earthworms. So where did they go?
The attractive benefit packages left when all those companies offering consolidation left the market due to the recession. When several companies were in the business of consolidating federal and private loans it was common to hear a borrower receiving a 1% discount after 24 on time payments and a .50 ACH discount on top of that. Now, .25 ACH is basically all that’s available, at least on the federal side.
The rates and benefit plans available to you are all linked to timing. If you graduated in the late 90’s your federal interest rates were consolidated at around 8%. In 2004-05 you were in the 3.5% range, with benefit packages taking you well under 3%. Today many students are stuck around 6-6.8%.
If you have older brothers and/or sisters who graduated a few years ago they will probably tell you what a wonderful rate they got. They are not lying. They just happened to be in the right place at the right time.
Five most recent student loan consolidation blog posts:
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Yeah, it’s unfortunate how the rates have increased a bit in recent years – mostly due to the down economy – but I’m hopeful that they’ll slowly start creeping back down. And who knows what’s going to happen with this new student loan reform on the horizon – Interest rates could change drastically either way.
September 20th, 2009 | #