Show notes, June 29, 2005:
+ News roundup
+ iTunes 4.9 supports podcasts
+ Boehners and interest rates

Link to MP3: Direct File Download

It occurs to me that now that we’re publishing our own content plus Podsafe music, we should be doing show notes as well, so that people know where and how to find stuff. The next few blog posts will be “back issues” of show notes.

We’re still alive… barely. We’ve been swamped, totally swamped, by the influx of student loan consolidation, and it’s pretty amazing. Thanks for your business! In other news, our podcast has moved to Feedburner so that we can track our subscribers… check it out!

http://feeds.feedburner.com/StudentFinancialAidNews

Tune in today - and if you hadn’t heard, iTunes is now circulating feeds. That’s HUGE. We’re doing our darnedest to get listed.

Yes, ladies and gentlemen, it’s true. The Student Financial Aid News Podcast has hit the big time. We’re listed in the iTunes Podcast directory!

http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewPodcast?id=73799036

Time to get cranking on all that bumper music, I guess!

8 days until your consolidation application needs to be postmarked in the mail to us - because after that, we can’t guarantee your application will receive today’s low rates. That’s not to say we won’t accept it or do our best to get you today’s rates, but the bottom line is this: June 24, 2005 is the date your application must be postmarked by in order to be guaranteed today’s low rates. After that, all bets are off.

Yes, it’s true. You can now consolidate your loans even if you’re in school.

Not too long ago, you submitted a request for a student loan consolidation with StudentLoanConsolidator.com, and at that time we informed you that because you were in school, you were not eligible for consolidation. We are happy to inform you that the regulations governing in school consolidation have changed. You *may* be eligible now for in-school student loan consolidation.

How it works: The reason you originally submitted an in-school consolidation request was probably due to the fact that student loan interest rates are currently at all time lows, and those rates are going up by as much as two percentage points beginning July 1. In order to process your in-school consolidation, your current student loans will be put into automatic repayment as part of the consolidation, and then deferred for the remainder of the time you are in school.

Eligibility: Regardless of whether you are in school or not, it is still a requirement that you have more than $10,000 in *federal* student loans (excluding private, non-government loans). How to consolidate: To consolidate your in-school student loans, simply reply to this email with the FIRST FOUR DIGITS of your social security number and the YEAR of your birthdate, for security purposes. We will reactivate your student loan consolidation and, if you are eligible, we will send you a consolidation application in the mail.

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Important Facts About In-School Consolidation

1. Who is eligible for an in-school consolidation? Any currently enrolled student attending at least half time, graduate or undergraduate, who has at least $10,000 in federal student loans.

2. What is the benefit of an in-school consolidation? The benefit is that while interest rates are still at the lowest they have been in history, the student can consolidate any loans that have already fully disbursed, thereby locking in the low interest rates on at least the loans they already have outstanding.

3. What is the potential risk for the student? When borrowers consolidate while in school, they waive their right to the grace period that they would have otherwise enjoyed for six months (nine months for Perkins) before entering repayment. A student must weigh the benefit of the locked-in low interest rate vs. the benefit of having a grace period upon separation from school.

4. Does the borrower have to pay on the consolidation loan while in school? The borrower will be issued an in-school deferment based on national enrollment data and original Anticipated Graduation Date (AGD) upon consolidating. This request is included on the consent form that the borrower signs when they acknowledge that they will be waiving their grace. The borrower receives two notices from ELSC – one is their consolidation repayment notice, and the other is their in-school deferment notice.

5. What if the borrower does not want the in-school deferment status, and prefers to enter repayment while attending school. A borrower may choose to enter repayment while in school. However, the borrower is then forfeiting the subsidy provided by the in-school deferment (the government paying the interest on the subsidized portion of the loans while the borrower is in school).

6. Will an in-school consolidation loan be eligible for the standard borrower benefits? Yes, if a borrower enters repayment while in-school, they will qualify for the .25% rate reduction for auto-debit, and the 1% rate reduction after 36 on-time payments if the balance is at least $20,000 at the time of consolidation. If they go directly into an in-school deferment, they will be eligible for their borrower benefits upon entering repayment when they separate from school.

7. Does a borrower have to attend an exit interview before consolidating their loans while in school? No, although the borrower consolidates and may enter repayment, they are not required to attend an exit interview until they separate from school.

8. May a borrower consolidate Perkins loans while in-school? Yes, if a borrower chooses to include their Perkins in their consolidation loan, they may. However, inform the borrower of the following: The Perkins is fixed at 5% so there is no risk of the interest climbing above that mark. The Perkins loan has a NINE month grace period that they will be waiving if they choose to include the Perkins in their consolidation loan. A borrower should avoid consolidating their Perkins loans if there is a chance that they may be forgiven based on the borrower’s career choice. A borrower will lose their Federal subsidy on their Perkins loan when it becomes consolidated.

9. If a borrower decides to cancel their consolidation loan, will they still receive their grace rate and in-school deferment? No, in order for the in-school consolidation to be processed from a servicing perspective, the borrower’s loans must technically be put into a repayment status, and then consolidated. Once the grace waiver consent is received, the loans will enter a repayment status, the grace will be waived, and the school separation date will be reported as the date on the waiver received from the borrower. These steps cannot be reversed. So, if a borrower sends in their grace waiver consent form, but does not consolidate, they still will lose their grace period and their in-school deferment status.

10. Will the borrower receive subsidy benefits and a grace period on future loans they take out? Yes, the borrower is only waiving their grace and subsidy benefits on the loans they agree to consolidate. Loans taken out in the future may be consolidated also, but until that time, those loans will retain their benefits.

11. Can a borrower make interest payments while in their in-school deferment period in order to avoid interest capitalization on their unsubsidized loans? Yes, a borrower may make “unscheduledâ€? payments during their in-school deferment on the unsubsidized portion of their loan. Those payments, however, will not count towards their 36 on-time payments to receive their 1% interest rate reduction. Only when they are in repayment with a payment plan selected does the clock start on the 36 payments. If a borrower chooses to enter repayment during school, thereby waiving their entitlement to an in-school deferment, they must choose Select 2 or Select 5 if they only want to pay the interest. Those payments will then count towards their 36 on-time payments. If they are late on a scheduled payment while in-school, they will lose their eligibility for the 1% rate reduction. For borrowers who make full and on-time payments during a period of authorized deferment or forbearance, ELSC will manually add that number of payments to the Compass Timely Repayment Counter attribute in order to count toward their 36. Please note* this is not an automatic process and will require direct contact request from borrower.

12. At what interest rate will the loans be during the in-school deferment after consolidation? The interest rate on the in-school consolidation loan in an in-school deferment will reflect the deferment rate, with a 6/10 reduction from the full interest rate. This rate is the same as the rate the loans receive while in school or in grace.

What is that sizzling sound? Why, it sounds like a fuse… burning… towards the time bomb that is the student loan interest rate change. Yes, folks, time is running out real fast for consolidating your student loans before the rate change. Today is June 15, 2005. Assuming it takes 3 days to receive an application and 3 days to mail it back, you need to apply by this Friday, June 17, and have your completed, signed application BACK IN THE MAIL by the following Friday, June 24, 2005, to be sure that your rates can be locked in. Otherwise, you’re looking at a 1.93% bump in your interest rates, from 2.77% at the lowest to 4.7% - and that means hundreds of dollars a year extra in interest. Do it now. Visit http://www.TodayISave.com and get it done!

Student loan rates have been set for the coming year! 4.7% if you are in school with Stafford Loans 5.3% if you are making payments on Stafford Loans 6.1% if you have PLUS Loans Don’t feel like paying these rates (which are 70% higher than last year)? Consolidate! Consolidate! Consolidate! Consolidate! Consolidate!

The Financial Aid Newsletter for June 2005 is going out now!

http://www.FinancialAidNews.com/jun2005.php