iowa student loan consolidation
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Students, parents rushing to consolidate loans before deadline
College students and parents are clogging phone lines and rushing to Internet sites in a scramble to refinance college loans before a sharp interest rate increase this weekend.An almost 2 percentage point interest rate increase for federal student loans kicks in Saturday, and advisers say that not refinancing could cost thousands of additional dollars in interest in the decades after a student enters the work force.Tim Bornemeier, managing director for Lincoln-based student loan company Nelnet, said Thursday he’s been seeing a "record-setting amount of calls."Bornemeier said Nelnet has seen a steady increase in call volume over the last six to seven weeks.He said operations have gone smoothly, as most people calling have been prepared and fairly well-educated about the process. Nelnet was prepared, too, as Bornemeier said the company added 100 people to its workforce over the past few months to deal with the increased consolidation business.Bornemeier said Nelnet, which is one of the largest student loan consolidators in the country, this year expects to exceed the more than $4 billion in loan consolidations it did last year.Other loan agencies also are experiencing high demand.For-profit Sallie Mae, the nation’s largest student loan holder and one of Nelnet’s main competitors, is on pace to meet or exceed last year’s late crush of student loan consolidations, said Pat Scherschel, the company’s vice president for loan consolidation.At the Missouri Higher Education Loan Authority, the nation’s 12th largest student loan holder, calls were coming in at a clip of up to 15 a second, contributing to a tenfold increase in applications for student loan consolidations, said Raymond Bayer Jr., the agency’s interim executive director.Nonprofit student loan agencies in states including Iowa, Indiana, Ohio and Texas also have seen sizable increases in their applications as the rate increase approaches, said Alexa Marrero, spokeswoman for the Education Finance Council, an association of nonprofit secondary student loan marketers.The federal government adjusts interest rates on its student loans each July 1 based on a formula tied to the yield on short-term Treasury bills.The variable rate on a common Stafford loan dipped to as low as 2.77 percent for students in the 2004-2005 school year and 3.37 percent for graduates already making repayments.
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Nelnet computer tape missing
Lincoln-based student loan provider Nelnet Inc. says a computer data tape containing the personal information of as many as 188,000 customers is missing.The company said the tape, which included data on loans serviced by Nelnet that were previously serviced by the College Access Network between Nov. 1, 2002 and May 31, 2006, was in possession of United Parcel Service and cannot be located. Nelnet said in a statement that it is notifying its potentially affected student loan customers, as well as other lenders whose customers may be affected. Those customers may call a dedicated toll-free number at 1-800-552-7925 if they have any concerns or questions.Nelnet did not say when the tape was lost or if it was picked up in Lincoln, and company representatives could not be reached Tuesday morning.The company said it has no reason to believe any information has been used inappropriately, and has not received any reports of unauthorized activity. Though UPS cannot locate the package, Nelnet said there is no indication that the package left UPS’s control at any time. "We deeply regret this unfortunate incident and are making every effort to inform our customers of the missing data tape and to assist them in protecting their identity," Matt Hall, Chief Operating Officer of Nelnet’s Education Services division, said in a statement."Tapes of this nature require sophisticated equipment and data-mapping for information to be accessed. The process used to create these tapes is no longer utilized," said Ray Ciarvella, Nelnet Chief Information Officer. "Though our current policies meet or exceed industry security standards, we are thoroughly reviewing them to protect every customer."
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