refinance student loan
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Students Rushing to Complete Consolidation before July 1 Deadline
With interest rates rising nearly 2 percentage points on July 1st, students and recent graduates rushing to refinance their loans have been inundated with mail from consolidation companies looking for business.
The Chronicle of Higher Education reported that two of the largest consolidation companies reported ‘a threefold increase in call volume' in the past few weeks. Financial-aid advisers have been alarmed by aggressive, and at times, misleading language used by consolidation companies looking to cash in during the rush. They advise confused borrowers to proceed with caution and fully understand the fine print of offers they receive.
Financial-aid advisers expect consolidation to continue - albeit at a slower rate - after the deadline. Congress recently repealed the ‘single-holder' rule meaning that borrowers in the guaranteed-student-loan program will now be able to consolidate with the company of their choice.
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Students Rush to Refinance as Deadline Approaches
With the cost of consolidating student loans set to spike on July 1, college students and recent graduates are rushing to refinance their debt, and consolidation companies are scrambling for their business.
In recent weeks, lenders have bombarded borrowers with letters and e-mail messages exhorting them to lock in current interest rates before they rise by nearly two percentage points, to 7.14 percent. At least one lender is sending students checks worth hundreds of dollars that they can cash when they make their first payment on a consolidation loan.
But the lenders' aggressive and sometimes misleading sales pitches make many financial-aid advisers uneasy. They say they have been inundated with calls from worried students who have received offers that are disguised as overdue bills or official government correspondence.