<p>Wonder if others are in the same boatski...</p>
<p>Took Parent PLUS loans out for D1 for 4 years through her state school, kept current with payments, still paying. When D2 started school in Fall '09, that Parent PLUS loan had to go through US Dep't of Education by Federal law, and they farmed it out to a lender in D2's college town.</p>
<p>NOW, all of D1's current loans have magically been transferred over to that lender in D2's college town. When I found out about this, no one could figure out how it happened.</p>
<p>The good news is that they're all in one place, but none of the past history for D1's loans are there. Fortunately, we kept records and correlated everything to make sure that we weren't being scroogied, but still...</p>
<p>I know that the Federal Gov't took control of all education loans at some point, but how did this shuffling happen without our approval or even consultation?</p>
<p>This is nothing new. It has been happening for years, long before the federal govt changed everything to direct loans. My son’s 4 Stafford loans were sold so many times he stopped reading the notifications after a while. (he probably would have lost track of who the heck was holding them if it were not for the web site that lists all your federal student loans).</p>
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<p>Pretty standard for loans. You don’t have to give approval for loans to be sold on, nor do the lenders have to consult you about it. We had the same happen with our mortgage in the past. We found out about it after it was a done deal.</p>
<p>All of my daughter’s loans are in her names with my husband as co-signer, not PLUS loans. No one would consolidate, so she makes eight payments a month - one federal and one private for each year. They are bought and sold on a regular basis and it drives her crazy trying to keep up with them. To make it worse, she doesn’t have a steady job and relocates frequently (new apartment every fall in the city where she is a substitute teacher and then summers living at a camp that employs her) so sometimes they are sold and the new lender doesn’t catch up to her in time to get a payment on time. We are never notified of the lender change unless the mix-up results in a late payment. Fortunately they’ve always let her slide on the bad credit report or raised interest when she points out the problem.</p>
<p>I’m much happier with the younger daughter’s loans. She is just starting the grad level of a medical professional degree. Her lender (national level bank) has a special loan program for medical careers and does not require a co-signer, just asks how much she wants and where to send it. Since the grad program will cost 6 figures, I’m VERY glad not to have our name on them!</p>
<p>The federal student aid loans moved to Direct Lending this year, with the government as lender (rather than banks). Every student is randomly assigned a servicer (there are four servicers used for DL), and all loans for this student will be with the same servicer. Behind the scenes, there is a lot of activity lately in moving existing loans around. I suggest that everyone watch their loans very carefully - make sure you keep records of the loans, and make sure that any changes make sense. Every student … and parent, for PLUS borrowers … should regularly monitor their loans at [National</a> Student Loan Data System for Students](<a href=“http://www.nslds.ed.gov%5DNational”>http://www.nslds.ed.gov).</p>
<p>I wonder if this bank might be willing to consolidate, since they now hold all the loans? That might be an advantage.</p>
<p>Kelsmom, do you know if the new direct lending situation will allow for easier consolidation for graduates? Seems like it should, since there are only 4 servicers.</p>
<p>I don’t know how DL is going to affect consolidation, to be honest. From now on, since all loans will be DL, there will be no reason to consolidate … which is helpful. How the move to DL will affect consolidation, though, I am not sure. It’s a good question. The old servicers are still servicing loans, although some of the REALLY old servicers no longer are not. Those seem to be going to DL for servicing now.</p>
<p>Not much sense in consolidating at this point. Most all of them are at 7.9%, with an older, smaller consolidation at 6.125%. I’ve lined up the payments so they can all be done online the same day of the month. And I’ve had to defer one of the new ones 'cause the monthly nut was getting way high. Fortunately, as long as the student is in school full time, that’s possible. Of course, the interest still accrues. The government LOVES making 7.9%.</p>
<p>I have to tell you, something’s gotta give here. Either they loosen up some of the penalties & don’t count early IRA distributions for college expenses/loans as ordinary income of the year of disbursement, or there will be tons of defaults.</p>
<p>Can’t default anymore. Declaring bankruptcy doesn’t remove them either. Student loans cannot be escaped. But some of the new government loans can be forgiven after a certain number of years for low-income people who have never missed a payment, and for some public sector employees. Don’t have the time to search for the exact details right now.</p>
<p>Due to a major change in income, we just received forbearance on some of our loans. We just got an email yesterday that the loan were in forbearance for one year with no other information given. We plan on paying the interest each month, but have to call about how that is done to make sure it is credited correctly. While we were happy to see we were approved, a bit of information and instructions would be nice!</p>
<p>The trend I’m seeing is that these ‘servicers’ designated by the government are absolutely overwhelmed by the number of loans funnelled over to them, and have people on the phones with very limited knowledge of the differences between deferring loans, forbearances, interest-only, etc. The government is pretty flexible on granting these things because I think they understand the hard times people are going through right now, as long as you end up paying the P&I at some point. Again, they LOVE earning those high interest rates for the money they lend out to you.</p>
<p>As kelsmom says, watch the servicers’ handling of these loans like a hawk because chances are there’ll be a bonehead screw-up somewhere along the line.</p>
<p>My son’s lender, after nationalization, did in fact consolidate the loans and blended the interest rate. (Interesting, the ndsl site still shows them separately.) But, my plan was to pay down the loans, the higher interest rate ones first. Have sent in several payments with specific instructions to pay down loan obtained on xx date, and, of course, the government-contractor noobs applied the check against the consolidated balance. Of course, it has taken 90+ days to even credit the payments. (I’m guessing so that they can continue to receive subsidized interest money from Uncle Sam, since they were still in the grace period, post-grad.) Morons. </p>
<p>I have better luck with the offshore Call Centers used by the airlines.</p>
<p>US taxpayers will continue to pay my PLUS consolidator slightly more than 5% for the next 20 more years. I should have borrowed more, but I’m fairly fiscally patriotic.</p>
<p>Think you better 'splain yourself, LP. WTH does patriotism have to do with borrowing? As long as you plan on paying it back, it’s win-win, right?</p>
<p>This does not exist for Parent PLUS loans only Stafford. Neither do the IBR or ICR repayment options. Parent PLUS loans are pretty much excluded from everything. There are going to be HUGE defaults to come. What makes me laugh are the statistics that the average student debt is $23K after 4 years…this does not take into consideration any parent loans or private loans the student may take out.</p>
<p>The numbers are so skewed and the system so flawed!!! But what are we the lowly taxpayers supposed to do???</p>
<p>I haven’t read any articles about parents and HUGE PLUS loans. There have been plenty of stories of students with huge student loans that they aren’t paying in the press. Could it be that we parents acted more responsibly?</p>
<p>Yes. And they should start saving quickly, because according to the financial planners out there, one should expect to pay nearly half a million dollars for a four year education for a baby born today if you are “full pay.” :eek:</p>
<p>I don’t know about the borrowing responsibly… my older kid’s only way to attend college was to borrow heavily. When she started out, math educators were high in demand. In the four years it took to graduate schools started laying off teachers and teachers are postponing retirement. She’s about $40K in debt, which wouldn’t be a huge crisis if only she could get a job. She subs almost every day.
Younger kid pays no tuition due to scholarships and two campus jobs. She DID borrow a bit irresponsibly in that she used Stafford loan money to go on school-sponsored mission trips during a couple of breaks. She will be in hock six figures by the time she graduates because she starts the grad level of the Physician Assistant program in May. Classes are 8-6 every day, which means it’s nearly impossible to hold a job to cover her room and board. The fourth year is still at undergrad tuition and scholarship since she’s staying in the same school, but the final year is about $100K.<br>
Without the loans, many bright and able kids are condemned to low-end and unfullfilling (for them) jobs. Debt or despair? That’s a really hard choice to make. It’s not like they are using student loans for trips to Disney World…</p>
<p>One year is $100K?! Wow, I have two neices in PA school and a D in an OT program their grad years are nowhere near that expensive! Perhaps choosing less expensive schools would be a logical way to combat the need for high loans…</p>
<p>The final year is the grad year of the Physicians assistant program. She will be 40K in debt from the undergrad. The writing is a little convoluted.</p>