What Banks Consolidate Federal and Stafford Loans?

[Carbon44]

Hello All, 

  I am trying to help out someone and wanted to know what Banks consolidate federal and stafford loans. Location is CT incase that makes a difference for bank options. 

Thank You!

[Anonymous]

I am still curious (since your last post, actually) as to why this person would consolidate a federal loan into a loan from a private lender? That is potentially risky financial behavior, and in all the banks I researched, very few could offer a lower interest rate. Admittedly, it was a quicky internet search....but still.

So if the interest rate would be higher, and the borrower loses benefits and protections provided in federal loan programs - why do it?

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre43.shtm

From the FTC themselves:

"Be cautious about consolidating federal loans and private loans into one private loan. The result of consolidating all loans into one non-federal private loan means that you lose all the benefits and protections provided in the federal loan programs."

[trix_r_4_kids]

+1

Why not consolidate to a gov't backed federal student loan?

[Carbon44]

I don't know a whole lot about student loans. If you look at my last post you can see all of the loans they have. The main goal I am trying to accomplish is to have the loans consolidated so they do not have to keep track of say like 10 different loans (however many they have) and right that many checks or seperate payments online. I would like them to have just one payment they have to make which takes into account their loans. I also stated in my last post their interest rates for each loan and I feel as if those are very high. By having a co-signer consolidate them for him/her it would bring down the interest rate would it not? Thanks for everyones help!

[SCF]

The chances of a co-signer bringing down the interest rate below the current average rate (considering that many of the federal loans are at less than 7%) is probably not very high.  Most banks have gotten out of the business of private student loan consolidations because of high rates of default and the fact that they can no longer make federal student loans and consolidations.  The appeal of only one payment is high, I understand, but if your friend gets into any sort of financial difficulty in the future, they will wish they had the options and protections included in Federal loans.

Consolidate the Federal loans through Direct Loans, and look at their repayment options.  Maybe a good compromise is to go for the lowest possible initial payment so they can devote most of their resources to the private loan?  That way, they would be down to one payment in just a year or two, and would still have their federal loans with a favorable interest rate (it will be the weighted average of the existing loans) and all of the protections in place.

[Carbon44]

How would I go about learning info about how to consolidate their federal loans into direct loans? Also if they have direct plus loans can they consolidate those together? They will be paying $5000 down on the private loan very soon which will cut the loan in half. I appreciate your help and advise I just am confused on how to get the fewest amount of payments so they can easily keep track of their loans instead of paying back 10 different loans every month. Also how do I go about finding out the optimal amount they should put towards each loan per month? I don't want them to not pay some loans and then be in bad standing with some loans. Thank you all for your help

[Anonymous]

Try here, lots of good information:

http://studentaid.ed.gov/repay-loans/consolidation

Yes, you can consolidate direct plus loans. Based on your description from your last thread, this is what I would recommend if this was my loved one: Consolidate all Stafford, Perkins, Direct Plus and FFEL Plus loans. This will get him or her down to two payments total - one government loan, one private loan. The private loan's going to have the higher interest rate, and there's more potential problems if something happens financially - so paying the private loan off first would be the best goal.

Pay whatever the minimum is on the govt loan until the private one's paid off. After that happens, there's only one single payment. Easy.

[algorithmslave]

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@Carbon44 wrote:
How would I go about learning info about how to consolidate their federal loans into direct loans? Also if they have direct plus loans can they consolidate those together? They will be paying $5000 down on the private loan very soon which will cut the loan in half. I appreciate your help and advise I just am confused on how to get the fewest amount of payments so they can easily keep track of their loans instead of paying back 10 different loans every month. Also how do I go about finding out the optimal amount they should put towards each loan per month? I don't want them to not pay some loans and then be in bad standing with some loans. Thank you all for your help

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I would call Sallie Mae and/or Great Lakes and ask your question.....I have had awesome help from Great Lakes.