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| Student Loan Consolidation Options |
Question:
Is there much of a difference (for
the borrower) using Sallie Mae vs.
Dept. of Ed. Direct Loan
consolidation? What about private
lenders? One lender at says it will
consolidate a Citibank
loan
with the Direct Loans. Is that
correct? Is there anything to
watch out for with such an outfit?
It is a student
loan,
but (I guess) not a Stafford/Fed subsidized
- loan.
I know it is not subsidized
at all. The people at Dept.
of Ed. - have told me only federally
guaranteed loans can be consolidated.
If - I find out differently,
that would be a load off my mind.
Answer:
The only group that can consolidate
your Citibank loan into a Direct Loan
is the Dept of Education. The big
advantage of a Direct Consolidation
Loan is that you can pay it back as
a percentage of your income. Other
lenders may claim to have an income
sensitive repayment, but the terms
are not as generous (e.g. no loan
forgiveness after 25 years of repayment.)
The student loan consolidation program
is for Stafford loans. If this was
a private loan arranged through the
bank, then the way to find out about
other payment options is to ask your
lender.
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