Students Rushing to Refinance Loans

[Eugene]

June 28, 2006, 1:30AM
Students Rushing to Refinance Loans

By DAVID A. LIEB Associated Press Writer
© 2006 The Associated Press

JEFFERSON CITY, Mo. — Thousands of college students and parents are clogging phone lines
and rushing to Internet sites in a scramble to refinance college loans before a sharp
interest rate increase this weekend.

An almost 2 percentage point interest rate increase for federal student loans kicks in Saturday,
and advisers say that not refinancing could cost thousands of additional dollars in interest
in the decades after a student enters the work force.

At the Missouri Higher Education Loan Authority, the nation's 12th largest student loan holder,
calls are coming in at a clip of up to 15 a second, contributing to a tenfold increase in
applications for student loan consolidations, said Raymond Bayer Jr., the agency's interim
executive director. Other loan agencies also are experiencing high demand.

For-profit Sallie Mae, the nation's largest student loan holder, is on pace to meet or exceed
last year's late crush of student loan consolidations, said Pat Scherschel, the company's vice
president for loan consolidation.

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Full article: http://www.chron.com/disp/story.mpl/ap/nation/4008452.html

[Sherman A1]

1. Of course

There is the plan B to repaying student loans that I understand my Republican Brother-in-law uses.... Just don't pay and everything works out nicely. Saves all those stamps mailing in the payments and increases the cash flow so we can buy the McMansion in the nice neighborhood, with the trophy wife, the nice vacations and cute little kiddies.

[geomon666]

2. And then they take his Social Security away.

See it all works out.

[leftyclimber]

3. And if you have Perkins or HHS loans, it's a double-edged sword

You don't get the 2% interest rate hike if you consolidate, but you lose the benefits associated with those loans, including some cancellation benefits (Peace Corps, certain teaching programs) and the extended grace periods.

Caveat emptor.

[Sammy Pepys]

4. I got bummed out the other day...

Went to refinance and found out my loan was a private loan. I had known all along it was, but hadn't connected the dots that you can't refinance those.