New student loan rules will cost you a bundle.

**SHOPGIRL** · 12-28-2005, 11:53 AM

Consolidate your student loans if you haven't already done so! Also, if you have a kid in college, check out this article.

http://www.suzeorman.com/igsbase/igs...jump&GnavID=44

**hollyhill** · 12-28-2005, 01:20 PM

Oh man!
I am glad this doesn't apply to us!

**SHOPGIRL** · 12-28-2005, 05:35 PM

I consolidated mine a few years back,so I'm really glad I did it then.

guest7 · 12-28-2005, 06:06 PM

I also want to point out this.

While consolidating your student loan might lower payments (SAVE 50% on your payments by consolidating now-hype), but you need to do the math.

For instance, I consolidated my student loan for $20,000 +/-. The payment is now $117/mo for 20 years. That means that I would be paying $28,080 +/- for my student loan. That's $8000 in interest payments.

Prior to consolidating, I was paying $342 (combined) and would have paid off my loan in 10 yrs or so and my payment would lessen over time as I pay off the oldest loans first. My total interest I would have paid was $4000 or so.

That is hardly saving any money at all. In my situation, and I am sure others too, I would be paying $4000 MORE after I consolidate if I follow thier payment plan.

So, I decided to continue to pay my previous monthly payment of $342 and my loan will be paid off in 5.5 years and only pay about $2000 in interest. Saving me about $2000 in interest and 5 more years of payments.

Now that's taking advantage of a lower interest rate!

Did the same thing with my mortgage when the rates went down.

**SHOPGIRL** · 12-28-2005, 06:07 PM

My student loans have a 4% interest rate and next year, the rate will fall to 3%. I consolidated to save on interest. My loans were up to 9% initially. So, the interest rate savings has saved me money. Another thing to consider is how much other debt you have. I'd rather pay of my cc debt first, then tackle the student loans. With any loan, you can always make an extra payment towards the principle.

**Valerie in WA** · 12-30-2005, 05:41 PM

Pardon the soapbox here, but I really don't care for the tone of Suze's article - she seems to think the government owes everyone a subsidized loan. I would disagree. Suze says: "Students will pay a fixed rate of 6.8 percent on their Stafford student loans. Parents, who take out loans through the PLUS program will pay a fixed rate of 8.5 percent." Those are very reasonable rates for a loan. Compare them to car loans, home loans, credit cards and personal lines of credit.

**SHOPGIRL** · 01-01-2006, 07:08 PM

Valerie,

I agree. The article was a little biased. The loan rates are at a good interest rate. When I was in school, the interest rates were even higher. It's not the governments job to subsidize people. I posted the article just for the information and to make people aware that the rates were going up. The can certainly save money by consolidating at a lower interest rate.

**Valerie in WA** · 01-03-2006, 03:37 PM

Originally posted by SHOPGIRL
...I posted the article just for the information and to make people aware that the rates were going up. The can certainly save money by consolidating at a lower interest rate.

Absolutely!

I just got off topic because her tone ruffled my feathers.