<p>We are just starting the process of paying for college with our oldest D starting next year. She has yet to decide for sure where she is going, but many of the schools are about the same $$$ after Merit & Need Aid are figured in. </p>
<p>We (D & us) will both be contributing to the cost. D is planning on being able to pay about 5-6K per year out of earnings each year, but will need borrow a similar amount most likely. We could probably pay a similar amount out of monthly cash flow if needed, or borrow if there are advantages down the road.</p>
<p>I am wondering a couple of things;</p>
<p>1) daughters borrowing - can she "consoladate" any type of institutional loans that she would take out once she is done with school? Are there limits as far as mixing say a Staford, Fannie, and Bank loan? What about a "private loan" (from a relative) that is NOT an institutional loan - could this also be consoladated?</p>
<p>2)For Parents - advantages of Home Equity Loan/Line of Credit or other loans such as PLUS loans? We have a ton of available equity so dont need to worry about "using it up" so to speak. Can our loans also be wrapped up into HER consoladated loans, or is that just for laons strictly in her name.</p>
<p>3)Down the road - can she wait until after Grad School to consoladate even her undergrad loans? Are any loans better than others as far as "forgiveness" goes - either in regards to "service work" or in the instance of disability or death? ( I have heard that this is a feature of some loans, but not sure what kind).</p>
<p>With most of the corporate federally subsidized loans you can only consolidate once. That was handed to them as a result of lobby pressure.
That said the larger companies such as SMC and NNC are reluctant to allow consolidations. It’s not unknown for them to block attempts by borrowers to consolidate as they wish to hold these notes within their systems. However it’s not uncommon for them to sell these same notes to subsidiaries, at higher rates and enhanced fees. Which is ironic or immoral depending on ones perception of the matter. Additionally last year several of the major players announced they would no longer do consolidations. </p>
<p>It is a problem and quite a mess. Many of the economic boffins are quite worried that credit cards and student loans could be the next domino in financial collapse. But perhaps due to these potentially increasing troubles and serious worries in the financial/government sectors about the same-there might be greatly increased congressional pressure to open up consolidation possibilities for student borrowers and their families. The corporate people involved in this situation won’t like it and will exert their massive lobby and influence machine against such a move…but it may be politically forced upon them because the student loan situation has the obvious potential to become a major problem as more student borrowers are unable to pay under the current rates and terms structure. </p>
<p>As far as consolidation it may be better to wait and hope for changes. Concerning current loans it’s obvious from statements coming from the Obama administration that they intend to move the system to federal directs-and some schools are promoting these partially out of genuine interest for student welfare, federal pressure, and partially from the desire to avoid the increasingly adverse public perception of the subsidized corporate loans.</p>
<p>Perhaps the best tactic (if possible) is to wait until the situation is resolved. And it will be by either reform of the student financing system or its systemic collapse. Obviously many of us in academe would prefer the former alternative to the latter…</p>
<p>“3)Down the road - can she wait until after Grad School to consolidate even her undergrad loans? Are any loans better than others as far as “forgiveness” goes - either in regards to “service work” or in the instance of disability or death? ( I have heard that this is a feature of some loans, but not sure what kind)” </p>
<p>Perkins and federal directs. And in general these are within very limited parameters such as public school teaching in under served areas and some medical work. </p>
<p>As far as “forgiveness” for corporate subsidized, no. Dead, alive, out of work, crippled or taken to the rapture…forgiveness for these loans is about as probable as getting ice cream and lollipops from Satan.</p>
<p>3.) When a Stafford/Perkins loan debtor dies, the loan IS totally forgiven, as long as someone provides a copy of the death certificate to the lender or servicer. This is federal law and applies to all types of Federally backed loans (Stafford,Perkins, FFELP or Direct) and is VERY simple and painless. I’ve even had 2 students loans forgiven due to death, just by mailing them a copy of the death certificate.</p>
<p>She could consolidate before or after grad school, it won’t matter. Once you have consolidated, you cannot consolidate the loans again unless you take out additional loans…which is the reason the consolidation rules changed…people were consolidating the same set of loans over and over again to avoid having to repay the loans.</p>
<p>1.) Staffords and Perkins loans can be consolidated into one loan, but it is not advisable to combine Stafford and Perkins, as Perkins loans have better benefits when left outside of consolidation. Some types of private loans can be combined into the consolidation with Stafford and Perkins but not all. Private loans made by friends or relatives can not be consolidated.</p>
<p>You cannot consolidate parent’s loans with student’s loans. The student can consolidate all of the student loans after graduation.</p>
<p>Are you sure you want to mess with home equity? With homes dropping in value this might be a problem down the road.</p>
<p>Check into the fine print of consolidation policies at the Sallie Mae website. That site has been super helpful over the years and explains loans in great detail.</p>
<p>The link you provided is quite an asset insofar as the information is accurate and presented in a restrained manner. And its interesting more of those type of organizations are arising.
But not entirely surprising insofar as even now, despite all the legal problems of 2007-8, that some of the information about student loans being given to students and families by colleges is being provided by the lending agencies. Entities which obviously have agendas separate from the best interests of students and families. </p>
<p>SMC seems to be providing a little more accurate information via their system. But in all probability they are doing so because they are quite aware that when there are serious attempts to change, reform, or penalize the entities in the student lending system they are going to be the first to be affected.</p>
<p>I have only slight reservations about this in general. Our home is paid for (no mortgage) and the amount we might need to borrow would be maybe 10% of the value. I had considered borrowing enough to be able to “loan” D the borrowed portion that she will need, and then when she is done hoping that she could “refinance” or consoladate what she would owe us. BUT, it sound like that would not work being a “personal” loan between us?</p>
<p>I guess what interests me about the HELOC is the low rates, but I will have to see how much difference in interest there would actually be. </p>
<p>It seems that if student need to borrow more than the Staford & Perkins amounts, there arent any “Federal” programs, that they would need to look to “Private” sources. Is that correct?</p>
<p>The only other federal source for loans would be the Parent PLUS loan. Other than that, your D would have to look to private sources to fund the remaining portion of the tuition bill.</p>