Student Loan Vultures Are Plucking My Eyes Out!
Posted on June 12, 2006 by Her and tagged student_loan
Sometimes I can't decide what's the worst part about my student loans...the $600 in interest that accrues every month, or the student loan consolidation vultures who mercilessly spam me with offers I do not even qualify for. Just today I received no less than four solicitations from different companies who want me to consolidate my student loans with them. My mail won't even fit in my mailbox anymore. I called the Opt-Out phone number two months ago and it's done nothing to stem the carnage.
The crazy thing is that I can not possibly qualify for their offers. Federal loans can only be consolidated once, and I did that when rates were lower a few years ago. The amount of trees that are wasted on this useless barrage is a shame. Anyone got any ideas?
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LSD | Jun 12, 2006
Just throw it away. I get plenty of spam, which goes strait into the garbage can.
As for consolidating again, I think that depends on the lender who is doing the consolidaiton. If the lender is ok with previously consolidated loans, then I think you can consolidate again.
Anne | Jun 12, 2006
HI Her,
I have a college loan question that I think you are very qualified to answer. My daughter is beginning her first year of college, and we are those awful parents who were not able to set aside anything to pay for her education. She has received a few scholarships. Only eligible for $600 in Fin Aid. Anyway, she will be securing a loan the we will help her with. Should we pay the interest on these loans while she is in school or just wait until she is out and start then. Now that I type the question, it seems kind of silly, but . . .
Oddly enough, when I consolidated with my original lender, I stopped receiving all the junk mail. But what you could do, and I've done this with other credit card offers, is mail back the empty prepaid envelope. Make them pay twice for all their stupidity.
Anne,
Your question is a good one, as there are many tax laws and loan rules to consider. Here's what I suggest: While your daughter is in school, give her cash gifts that equal the interest accrued and have her use them to pay off the interest early. This will allow her to take an annual interest tax deduction (you can't, unless you are the holder on the loan). After she graduates, any accrued unpaid interest will be capitalized and added to the principal of her loan. This changes the status of that money from being interest to being principal. This is important because this means that she cannot get the tax deduction on it anymore AND she'll be paying interest on her interest. There is nothing good about this scenario. If she is responsible for paying the interest all along then she will avoid the double-interest-no-tax-break mess. In addition, paying the interest now will make the loan feel "real" to her while she's in school, so it won't be a surprise when it comes due after graduation. Finally, help her do anything she can to minimize the loans required. I'll post in length about this topic soon. Good luck to you and your daughter - she's lucky to have parents who can help her make good financial choices and be her advocate!
The Travelin' Man | Jun 13, 2006
I am in the same boat with the consolidators. I have one loan, and it is paid directly to the Department of Education. It cannot be consolidated. I called once to find out -- they were offering a much lower rate than I was paying. I was told that I could only consolidate once. The funniest thing to me is that THIS SAME COMPANY still sends me consolidation offers.
There will be no happier day in my life when I pay off the remaining $18,896.43 (but who's counting?).
if those loan spammers have postage pre-paid envelopes, you can stuff their offers into the envelopes they provide and mail it back to them. They'll get the idea
Alternatively, you can call each one and ask to opt out...annoying, I know. I feel guilty about the trees too - I hate junk mail! The only thing I can do is recycle it tho.
Marie | Jan 15, 2007
I consolidated my loans twice -- without adding any new loans from new classes. Go through Dave Ramsey's program. I want to say I did mine in March or April of '06 so things might have changed since then. At least call and ask!
savvy saver | Jun 12, 2006
My student loans have been paid off for FIVE years and I still get bombarded with consolidation offers. I tried explaining once that I had no loans to consolidate, but they didn't seem to understand ;)
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