Question:
I want to consolidate some Staffords, both unsubsidized and subsidized, and a Perkins loan. Everything is with Sallie Mae right now, so I believe that under the one lender rule that I have to consolidate with them.

My questions:

1) Is that correct that I have to go with Sallie Mae?

2) Would the interest be the same with any loan consolidation company - that is based on the Federal Prime Rate which for my loans from 19995 to 1997 would be 4.17?

3) Sallie Mae will immediately give me a .25 discount for direct repay but then they start the loan at a rate of 4.25 instead of 4.17 and I can't figure out why. The loan rep I spoke to had no explanation. I could call again, but does anyone else know what the reason might be?

Answer:
1) Is that correct that I have to go with Sallie Mae?

Single lender rule means that they have the first right to consolidation. If they choose not to, then you are free to go wherever you want.

2) Would the interest be the same with any loan consolidation company -

that is based on the Federal Prime Rate which for my loans would be 4.17? Interest rate will be the same with any lender based on the rules when you took out the loans.

3) Sallie Mae will immediately give me a .25 discount for direct repay but then they start the loan at a rate of 4.25 instead of 4.17 and I can't figure out why. The loan rep I spoke to had no explanation. I could call again, but does anyone else know what the reason might be?

When you consolidate the rate is rounded up to the nearest 1/8th of a percent. 4.17 will round up to 4.25%.