Why Can’t I Refinance My Student Loans…Again?
Every few months for the last two years, I get a letter from some company asking me to call re getting a lower interest rate for my student loan. The first time I got one of these letters, I promptly called. However, I was disappointed to learn that since I had already consolidated my student loans in the mid 90s shortly after I graduated from college, I was not eligible to get a reduced interest rate. I was bummed. New graduates could now consolidate at 4%, I was stuck somewhere in the 8% range. Somehow, that does not seem fair. My thinking was and still is that if homeowners can refinance their mortgage loans to get a lower interest rate, I should be able to do the same for my student loans. However, that is not to be. So damn the student loan companies and better yet — Congress who does not want to do anything for millions like myself who are in the same predicament.
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4 Comments
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February 11, 2005 at 10:58 am
JC
There was an article about this problem in Newsweek this week (I got a free sub from my Chicago public radio donation.)…it’s one of those terrible fuck-ups in the system that is hurting a ton of people right now.
As for me, I held off on consolidating for a long time (my rates weren’t that bad, and I wasn’t short on payment money), and I got a 2.7% rate when I did…lucky me for graduating in 2000 instead of 1990, mostly.
February 11, 2005 at 10:19 am
Ursula
Heather: If I owned a home, I probably would take a home equity loan and pay off my student loan. Thus giving me the lower interest rate that I seek. But alas, I do not. Getting a personal loan is a possibility, but based on the amount needed, it will be somewhat difficult since I do not have property to put as collateral.
Suzanne: What bothers me most about not being able to refinance my student loans is that society puts a great deal of pressure on students today to pursue a college degree. Getting such a degree is often done at great expense and requires most to take out student loans. Worse yet, most often find it difficult to find a job that is both professionally as well as financially rewarding. Heck, I know many people who are in low paying but professionally rewarding jobs and they are struggling to make a significant dent in their student loans. I also know folks who have sold their souls to the devil so they can more quickly pay off the debt. Yet they are not professionally fulfilled. Thus, this is most upsetting. Particularly since other industries benefit from lower interest rates, while students who graduated some time ago and consolidated are being penalized. Personally, I think it is just not fair and Congress needs to do something about it.
February 11, 2005 at 9:57 am
suzanne
not to brag, but I’m one of the lucky one’s who graduated recently. 3.6%
However, I do think its ridiculous that you can only consolidate once.
Yes, there are credit cards out there with 0% interest if you don’t use the card to buy anything. If you DO use your card with the 0% interest to buy something the interest sky rockets to 28%, or something equally insane.
February 9, 2005 at 1:47 pm
Heather
Can you just get a loan at a lower rate and use that money to pay it off, leaving you with the same $ debt but at a lower interest rate?
I’m not sure how much you owe, or what a personal loan rate would be, or if they even allow that. Just thinking out loud.