consolidating student loans?

Question

Can you consolidate student loans that were taken out for two different people? I would like to combine my loans with my husband's- is that possible?
Also, does anyone have suggestions on reputable agencies to consolidate your loans with? I have received mailings from Nelnet and Sallie Mae- does anyone know anything about either?
What is a good interest rate to accept for consolidation?

Answer 1

Spousal consolidation used to be allowed but the law allowing it was repealed for some very good reasons which we sometimes call the "5 Ds" of Spousal Consolidation. These 5 are...

Deferment, Disability, Death, Divorce... DON'T

Essentially, in a spousal consolidation, both partners take responsibility for the full amount of each persons' loans. So, you own all your loans PLUS his and he, in turn, owns all of his loans PLUS yours. Both loans are now in both persons' names (and on both credit reports). This means that, in order to qualify for a benefit (deferment, loan forgiveness, etc.) you both have to be eligible for the benefit before it can be granted. To elaborate:

Deferment:
-- In-School Deferment: A borrower is normally eligible for in-school deferment any time s/he goes back to school at least half-time. But, if your consolidate your loans with your husband's, your loans are only eligible for deferment if he, too, returns to school!
-- Economic Hardship Deferment: Normally, if you as a solo borrower ever had trouble repaying your student loan debt, you can get your loans deferred by showing your lender that your payments exceed a certain percentage of your income. However, if you consolidate your loans with your husband's, you would BOTH need to qualify for this deferment.
-- Unemployment Deferment: Normally, if you lost your job and couldn't handle the monthly loan payments, you would be eligible for this deferment; however, if your loans are consolidated together, he would probably have to lose his job, too, before you qualify.

Disability: This is a big one. Loans in your name can be forgiven (i.e. written off, canceled) if you become totally and permanently disabled. But, since Spousal Consolidation loans would be in BOTH of your names, both borrowers (you and your husband) would have to become disabled in order to qualify. If you alone became disabled, he would be 100% responsible for repaying your debt.

Death: Same thing as disability. If a borrower dies, his/her loans are canceled. But if those loans are consolidated with a spouse's, they are sort of "co-owned" and therefore they become the burden of the surviving spouse. Not a very nice legacy.

Divorce: IF this ever happened to you, what a huge mess it would be! Since you can't unconsolidate, you would be stuck, (even in divorce/separation) with this jointly-owned debt. Even if, in the divorce settlement, you made plans for one of you to take charge of the debt, you would still be at that person's mercy when it comes to repayment. If they didn't pay, the default would appear on your credit report.

Now, you are welcome to consolidate your loans on your own. Federal Consolidation Loan interest rates are set by the federal government based on the current rates. At present, the Stafford Loan interest rate is fixed at 6.8%; Perkins loans are at 5% and have been for a looong time. If you are consolidating a variety of loans, the rate you receive will be a *weighted average* of all your loans' rates: so, if you have twice as much Stafford debt as Perkins debt, the rate would be somewhere in between 6.8% and 5% but more weighted towards the Stafford Loan rate.

The only difference that you'll really see in interest rates will come from the various incentives ("borrower benefits") that different lenders will inevitably offer you in order to get you to consolidate with them. Sallie Mae is the largest consolidation lender that exists today. Citibank is the #2 lender -- also a fine choice. Nelnet is pretty good, too. All three have been around for a while and have made a name for themselves. When choosing a consolidation lender, benefits are important, yes, but it's also important to select a lender that's been around a while and has proven itself in the market. If you pick a "no-name" lender because their benefits sound good, make sure you ask yourself (and them), "What happens if you go out of business and my loan gets sold to another lender? THEN what happens to my benefit?"

You can get a list of popular lenders here: http://www.finaid.org/loans/biglenders.phtml
And see some companies' consolidation benefits here: http://www.finaid.org/loans/consolidationloandiscounts.phtml
And you can read about spousal consolidation here: http://www.finaid.org/loans/consolidation.phtml (scroll down to "Who Can Consolidate")

Answer 2

Yes, it is called spousal consolidation. However, some consolidating companies, i.e. Nelnet, will no longer combines spousal loans.
Check out companies like Student Loan Xpress or the Student Assistance Foundation. These companies allow spouses to consolidate your loans. Perhaps even Sallie Mae. My interest rate is 4.25%, actually it's 4% because I have the loan automatically deducted from my account every month now. However I consolidated before July 1, 2006. So rates probably have gone up. The cap for student loan interest rates is 8% but that's pretty high when you're talking thousands of dollars. Shoot for the 5% or lower range when searching for your consolidation.

Answer 3

Spousal consolidation is no longer allowed, and your interest rate will be calculated using the same formula (defined by the government) regardless of whom you consolidate with. However, many lenders offer interest-rate reductions for paying on time or via direct debit. It is important to read the fine print and understand how you become qualified for or disqualified for a lender’s borrower benefits programs. Beyond savings, borrowers should consider customer service, flexible repayment options, online account access and applications, reputation and industry experience when selecting a lender.

Sallie Mae consolidation information: http://www.salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/student_loan_consolidation.htm

Answer 4

My daughter consolidated inner most and federal. (maximum federal are easily privately held besides, basically federally sponsored/insured in case of default) there are distinct agencies that consolidate. My first advice may be do no longer consolidate with Sallie Mae or the others that originally write the loans on your college. they oftentimes are a lot less own to handle and experience that they have got you ever already, so do not favor to be aggressive. in case you do a glance for and study the options, you'll locate a consolidation plan correct for you. expenditures of activity and words replace, and there is not any individual corporation which will fit all monetary needs. basically be particular you get all of your loans listed once you consolidate. Your monetary help workplace should be able that could actually help you discover all of them. My daughter ignored one, so had to pay it one at a time. fortuitously it replaced into sufficiently small that she basically paid it off thoroughly. i know that would not grant you with a particular corporation to seek for, yet with any success that's going to provide you a start up in the right route.

Answer 5

it depends...