Student loan consolidation scam avoidance

March 1, 2008 7:39 AM

Student loan consolidation and the current economy: Should I consolidate now, or wait a few months? Are interest rates as they apply to student loan consolidation likely to drop? Bonus question: are you happy/unhappy with the company you consolidated with?

I have (lots of) student loans to consolidate, and I have until June before many of them come out of post-school deferment. Should I do it now, or later, or at all, and with whom? I know that there are certain loans I should not consolidate, as I am in a health profession and might potentially get some of them forgiven -- these are perkins loans, correct?

Also, can anyone point me to a reputable resource where I can read a lot about this? there seems to be an awful lot of hard-sell scammy stuff out there, and I can only do this once.

posted by jennyjenny to Work & Money (1 answer total)

When I was going through this (another health professional here with a mountain of debt), I was subscribing to the AAMC's listserv Money Matters which I found extremely helpful. They have an archive of consolidation questions here. I guess I would wait until June since interest rates are not likely to change a lot (will probably go down if anything) before then and right now you are enjoying a free grace period. If you're like me, you might have a lot of credit card debt to pay down or some purchases you need to make (house, car, etc.) and you may want to focus on that.

I consolidated with the company who held my loans originally because I was happy with them and I was concerned with the scamminess, as you say, of all these other programs that start sending you mail. I figure anything that requires you to pay a lot less now will really bite you later. There's no free lunch.

My consolidated loan was ultimately sold to Wells Fargo and I will tell you that they have been a constant headache for me and I would avoid them like the plague. I'm just about ready to explore moving my loans elsewhere. Their website and electronic payment system has been stuck in 1998 and I have had three payments not go through due technological glitches that they admitted were their fault, each time I received rude daily phone calls from them badgering me for their money until *they* were able to "find" the money that had been debited from my account. I don't expect to receive this kind of service when they stand to make $150,000 in interest from me.
posted by Slarty Bartfast at 10:10 AM on March 1, 2008