Consolidating/refinancing student loans

I'm starting to worry about student loans now that we are a few months from having to start making payments. They have been in deferment or forbearance through training. When DH started residency he consolidated the federal loans but the interest rate is almost 7%. He also has several smaller private loans with better rates but it will be so complicated making all these different payments each month. Has anyone post training been able to consolidate student loans including private loans? Did you go through your bank? Ideally it would be great to just have one payment to make each month, or even lump them together with a mortgage eventually when we are ready to buy a home. Is this realistic?

[Michele]

I consolidated mine with UHEAA. I have a 2.9% interest rate. Russ has his consolidated with StudentDirect or something like that. He consolidated the year after I did. He has a couple of private loans that he wasn't able to consolidate. They are at a 10-15% interest rate and we hope to pay those off first.

[Deebs]

If you find a program that allows for consolidation of private loans, LET ME KNOW. We have looked since graduation, and it has not been available. I do know that you don't want federal and private loans combined in any way. Federal loans are forgiven upon death, privates are not. I don't know how you'd lump them into your mortgage unless you have hundreds of thousands of equity in that house (in which case, why not sell the house, pay off the loans, and mortgage another home?).

We have a payment for the federals (and we are really lucky - our rate is around 3%, so that will be the last debt we ever pay off), and then three for private loans. They have variable rates, so right now they're really low. We're hoping that by the time the rates go back up we can have the cash to pay them off (our current rate is 5% on the highest loan). Our mortgage is 4%, so it would have been awesome if there was some way to lump student loan debt in there, but we have 80% financed, and that was the most we could finance at that rate. We pay out more monthly to student loans than our mortgage payment. It's sad, but it's also what allows us the salary to have that much debt, right? Good luck.

Thanks Michele and Deb.

Sorry I wasn't thinking when I posted about the mortgage, of course you can only borrow up to the value of the home (we are pretty clueless).

I didn't realize it was hard to consolidate private loans and that paying them off separately is just what people do. Ours are flexible rate too, so the interest rates are around 4% or so. I guess once we have the payments set up on a plan it won't be that complicated to pay them all (we have 4 separate ones).

Does anyone know if it is possible to refinance the consolidated federal loans or are we stuck with that high interest rate until they are paid off? It kills me how much interest has accrued just during residency. Of course the biggest loan has to have the highest rate too! He has about 140k in federal loans.

[HouseofWool]

You should be able to refi the federal loans. I know I did that with my school loans once upon a time. I would think you should be able to get the rate down to around 3-4%. Try talking to the holder of the loan.

[diggitydot]

I'll check with DH. I vaguely remember something about consolidating his loans right before graduation because his rates at the time were really high. I think he refi'd them down to 3.6% or 3.9%. But there was something wonky at the time. We had to hurry up and do it because the laws were getting ready to change and would have prevented the refi if we waited, I think. I don't remember why, though.

[bobk]

I'll check with DH. I vaguely remember something about consolidating his loans right before graduation because his rates at the time were really high. I think he refi'd them down to 3.6% or 3.9%. But there was something wonky at the time. We had to hurry up and do it because the laws were getting ready to change and would have prevented the refi if we waited, I think. I don't remember why, though.

I think there were major changes for the 2008-2009 school year. As a result of the financial crisis, interest rates jumped up significantly and some new rules were put in place making it complicated to refinance/consolidate.

Anyway, we don't use them, but always get offers in the mail from Sun Trust. Apparently they specialize in physician loans, so maybe you can consolidate the private loans with them. As others have said, it's best to keep the federal loans separate, even if you have to deal with multiple companies that service the loans.

Thank you. We'll start looking into the options now and see if it's possible. Up to now we have not thought too much about it since we have not been in a position to start making payments.

[MarissaNicole]

All DHs loans are federal "direct" loans which have a crappy 6.8% interest rate, which I don't think can be lowered, but the "benefit" is that we have the option to do income based repayment. Ugh I hate debt!

[Deebs]

DH's federal loans were at a much higher rate before consolidation. i wouldn't be sure that you're stuck at a high interest rate with those until you consolidate them. And, they're forgiven in death ( I know it sound terrible), so at least you don't have to raise your spouse's life insurance amount to cover them.

[houseelf]

Does anyone know if it is possible to refinance the consolidated federal loans or are we stuck with that high interest rate until they are paid off? It kills me how much interest has accrued just during residency.

Unless this has changed in the last year or two, this is a very frustrating and unfair no. My student loans are at 7.5%. DH's are at 2.9% He owes twice my amount and the payments are about $40 different. Suckage.