Consolidate July 1 or Bust ?

Parents Forum
1

<p>I can't seem to find anything regarding one aspect of consolidation. When you consolidate another commercial lender steps in and pay off all of your federal loans ( including fixed Perkins, and variable Staffords I think ) and put itself as the new lender. Please correct me if I am wrong. Now having said that, do the original in-school benefits like federal subsized interests ( no interests accum while in school ) carry over in the new "consolidated" loan ?</p>

<p>This canbe an issue if the new lender does not subsidize but capitalize (add int to principle ) while the student is in school. For example, if your student have the typical William Ford subsidized (which is Stafford by another name ? ) and a Perkin loan and your student plans to go to grad school, you are looking at 6-7 years in-school. The interests if not subsidized would be substantial when (capitalized) added to the principle. So it will offset any perceived benefits from the lower rate. </p>

<p>Would someone care to comment about this, I appreciate it very much.</p>

2

<p>If the student goes to graduate school (or any of the other approved reasons for deferral), a consolidated loan can be deferred, with the same conditions with which the loans which were consolidated into it could be deferred.</p>

<p>I have a combination of Perkins and Stafford loans, and the Perkins "part" of my consolidation loan will not accrue interest while I'm in graduate school, but the Stafford "part" will. Although the consolidated loan is just one payment, they're still keeping track of the individual loans within it in some sense.</p>

<p>I should say this with a disclaimer that I'm a freshly minted college grad, and I find all of this loan stuff pretty confusing. But I just finished consolidating, and I'm pretty sure I understand it to a point.</p>

3

<p>Thank you for your info. Good thing about it is this is the last yr of this craziness. Next yr all fed loans are fixed rate.</p>

4

<p>DS consolidated his Ford loans. He was not given any indication that his lender would change.</p>