I had taken out Graduate PLUS Loans to pay for my graduate schooling. A few weeks before graduation, I had met with one of my accounting professors to discuss possible job leads. We started talking about ways to save money, and he recommended consolidating all of my undergraduate and graduate student loans together once I had graduated. I was always looking for new ways to improve my financial situation, so after graduation, I called the first company that I came across on the Internet. This approach was a big mistake!
A few months after my consolidation, I still hadn't found a job and money was getting tight. I called my consolidation company and told them that I needed to use my deferment option while I tried to find a job. I had asked for a deferment because the government would pay for the interest on my subsidized loans during the time period that I was not making payments. The representative I talked to said that this wouldn't be a problem, and that I wouldn't have to pay my next month's bill. I felt relieved and thought that this would give me a chance to save some money since I wasn't working.
It wasn't too long after I filed for deferment that I got a job offer in Boston. I moved across the country and started my new job. I hadn't been receiving monthly statements and I figured that since I was in deferment, I wouldn't be receiving any until I started repayment again.
About six months later, I received a statement in the mail, which surprised me because I had planned to be in deferment for another five months or so. The statement said that I had filed for forbearance, not deferment! The problem is that the interest had accrued on my loans while I hadn't been making payments because the government doesn't pay the interest on subsidized loans in forbearance, only on loans in deferment! I about passed out when I saw how much unpaid interest had accrued!
I immediately got on the phone with my consolidation company and told them about the error. They told me that I had asked to use my forbearance options. I tried to explain to them that I had requested to enter into deferment so that the interest on my subsidized loans would be paid for. The customer service representative pretty much said that there was nothing that he could do about it. He went on to say that the notes in my file said that I had requested forbearance, and it was my word against the word of the customer service representative who took my call that day.
I was so irate! I looked at the statement again, and since the interest was adding up, my new monthly payments would be several hundred dollars more than what I was previously paying!
The next day, I was venting to one of my co-workers about how horrible my consolidation company was. She looked at me with pity and said that I should have consolidated my loans with Graduate School Loans. She said that Graduate School Loans consolidated her student loans with no problems. She also said that the loan specialists there work with each customer's account from beginning to end. This means that anytime customers have a question, they can call their loan specialist directly. The specialist knows each of their customers and their loans. My co-worker said that her loan specialist was highly qualified, very knowledgeable about her loan and answered all of her questions.
It sounded like consolidating my student loans with Graduate School Loans would have saved me a lot of trouble! But instead, I had to deal with several different customer service reps who didn't even believe me when I said that there was an error with my account! Even though I now have a job, I'm just about as broke as I was before I went into forbearance because my monthly loan payment is so high! I only wish that I would have done more research before committing to a company that didn't know very much about consolidation!
-Mariah R. - Boston, MA
I consolidated my undergraduate student loans with a large, national loan company. I figured that, being a large company, it would be a good choice. That was true until I had a question about my consolidation. It was a joke to try to talk to a live person. All I ever got were automated voices and the elevator music that you get stuck listening to while you are on hold. Several times I called with a question about my automated payment, and after about 30 minutes of waiting to talk to a real person each time, I finally hung up. I don't understand how such a large company can have such awful customer service!
Several years later, when I received my graduate degree, I got smart. I had heard from a few students working on their doctorate degrees that they had consolidated their graduate student loans with Graduate School Loans. They told me that it was never a problem to call Graduate School Loans with questions or concerns because you could always call the same agent who was handling your loans on his or her direct line. No waiting on hold!
It didn't take me very long to decide that I would consolidate my undergraduate loans together with my graduate student loans through Graduate School Loans. Now, whenever I need to talk to Sherra, my Graduate School Loans agent, I just call her direct line or send an email to her personal account. The days of talking to automated voices and listening to elevator music are a thing of the past!
-Jordan P - Michigan
I knew that consolidation would be a good opportunity to improve my credit, so I decided to consolidate with a popular student loan company. I had three undergraduate loans and five graduate loans that I wanted to consolidate together. I completed the consolidation application with the company and the customer representative told me that all eight of my loans were consolidated.
For the next eighteen months, I always made sure to make my payments on-time, if not early, to ensure that I would protect my credit.
I had just gotten engaged, and my fiancé and I were looking for apartments together. We found one that we absolutely loved and it was close to my work. We went into the apartment manager's office to complete the paperwork, which required a credit check. After running the credit check the manager frowned at me and told me that I had five student loans in default status. My fiancé gave me a questioning look. Embarrassed, I told the manager that there had to be a mistake. He showed me the computer screen and, sure enough, my name, social security number and all of my other personal information was accurate, and yet the screen showed that my credit was very poor due to the fact that my loans were in default. The manager told me and my fiancé that he couldn't rent us the apartment because tenants need to have good credit to rent there. He said to come back in a few years when I had better credit.
My fiancée gave me the silent treatment for the rest of the day. I couldn't live with that for much longer, so I called my student loan company to find out what was going on with my consolidation. The customer service representative told me that I had only consolidated my three undergraduate loans with them. That meant that I hadn't paid on my five other loans for eighteen months. No wonder that I was in default! I told him that when applied a year and a half ago, I was told that all eight of my loans had been consolidated. He said that it said in the notes that I only wanted three of my loans consolidated. I asked him why I'd want some of my loans consolidated, but not all of them. He commented that some customers have very specific requests.
I was very upset at this point and said that it was their error and that they should fix it. The customer representative replied that once I got out of default status, he would be happy to add the five other loans to my consolidation. I told him that I didn't want anything to do business with the company anymore!
Eventually, I got my loans into a rehabilitation program and for the next six months, I made all of the five loan payments on time. I was talking to a friend from college who told me that he was sorry for all that I was going through, but recommended that I consolidate the rest of my loans with Graduate School Loans. He said that he consolidated with them right out of graduate school and that they were very dependable and precise with their consolidations. He said that he was saving thousands of dollars off of his loans and that they had flexible repayment options to work with their borrowers.
I figured that things couldn't get much worse so I might as well consolidate with Graduate School Loans. I called to apply and immediately I felt better about the situation. My loan specialist, Lacie, was so helpful and informative. She said that all of my loans were finally consolidated and I could go online to view my account to verify this. I double-checked to make sure all of my loans were on the consolidation application, and Lacie was right.
Now I pay about half as much as I used to before I consolidated my loans and my credit is improving. I got a new car, and I got my finances back on track. I highly recommend consolidating with Graduate School Loans. They made a very bad situation good again.
-DeShaun - Pittsburgh, PA
I had heard from a few of my professors in graduate school that consolidating student loans was a good thing to do for your credit, and that the process could save me time and money. So, after I finished my graduate degree, I started looking for companies to consolidate with. I found a few companies that seemed fine, but none of them stood out to me.
Then one day I was surfing the Internet and I found a consolidation company that offered cash rebates to borrowers when they consolidated a certain amount of student loans. To a recent grad like me who had yet to find a very good paying job, the thought of a cash rebate was like music to my ears! My loans totaled $60,000, so I qualified for a cash rebate of $1,200. All that I had to do was make nine consecutive on time payments and then I'd get my cash.
I went ahead and consolidated my loans and made steady payments. After several months, I was telling my boyfriend that I'd soon be receiving some cash from the company that I had consolidated with. He didn't seem as excited as I was. He told me that companies offer cash incentives to lure people like me in. But in the long run, it is much more beneficial to go with a consolidation company like Graduate School Loans that gives interest rate reduction incentives instead of cash rebates. He told me that when he graduated he consolidated with Graduate School Loans and he was offered two interest rate reductions of 0.25% when he enrolled in the automated debit payment program and an additional 1.00% interest rate reduction when he made 36 consecutive on-time payments. He said that with Graduate School Loans' interest rate reductions, he was able to save $18,043 over the life of his $56,000 loans.
He asked me how much my loans were. I told him $60,000. He then grabbed his laptop and punched in some numbers. He told me that I could have saved $28,082 off of my loan, but instead I settled for $1,200. Ugh! I was sick when I realized that I could have saved myself $28,082, but instead would only get back $1,200! There was nothing that I could do at that point. My loans had been consolidated and I would have to listen to my boyfriend brag about how he is saving more than me for years to come!
My recommendation for anyone who is in the market to consolidate their student loans would be to be smart and not take the cash rebate offer. Instead, go with a company like Graduate School Loans that offers interest rate reductions that will save you real money!
-Tosha S. - Cincinnati, OH-
The Career Resources column is presented by EmploymentCrossing, America's leading job search site dedicated to getting people jobs.
IRS Reminds Students of "Tax-Advantaged Education Expenses"
By Surajit Sen Sharma
On September 11th, the IRS news release "Back-to-School Tax Breaks Help Teachers Pay Classroom Costs; Aid Parents, Students With College Tuition" stressed the importance of saving receipts and maintaining expense records to take full advantage of deductions on educational expenses and credits available on federal income tax returns for 2007.
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