The most certain thing about college loan consolidation is that it is always uncertain. It never remains stagnant. The rules and conditions constantly change. Sometimes, they even change every year. Most of the people think that federal loans will be beneficial to them and remain stagnant. However, this is not the case. Whether the loan is a federal or a private loan, it keeps changing. Needless to say, these changes somehow end up being beneficial to the lender. Very rarely, the changes benefit the borrower. However that situation is rare and scarce.
Who makes the most changes to college loan consolidation-federal or private?
While most people think it is the private who are not to be trusted with the college loan consolidation, the truth is that both federal and porivate lenders make changes constantly. However, the federal lender's changes hit the headlines, while the private lender's changes keep silently happening.
The private loan consolidation undergoes many more changes as compared to the federal loan consolidation. The main reason for this is that the private lenders can make their own rules and change it at anytime they prefer. Since they have the absolute power, they can make constant changes (though they have to work within the framework and procedures that bind them.)
What are the various changes that the lenders have made?
Whenever Federal lenders make changes to their loan policies, they affect a wide number of borrowers. Private lenders have the freedom to make changes to their policies whenever they like.
The changes that have been made to consolidation of college loans are rested below:
- In-school status consolidation: Only those loans which have been defaulted, deferred or which are delinquent or in grace period can be consolidated, Therefore, all loans that are accumulating cannot be consolidated if they are paying for the present education. This was brought into force from July I, 2007.
- Reconsolidation: The loans that have can existing consolidation can be reconsolidated from effect
- Joint consolidation with Spouse: The couples that are married do not have the possibility of consolidating their loans together as a single federal loan. This change came into effect from July I, 2007.
- Freedom of choice: The American Department of Education has proclaimed that nearly 40% of the students cannot exercise any choice about who their loan consolidation will be under. The lender has to be accepted by them. Again, their loan type and loan consolidation play a major role in helping them decide their lender. This provision came into effect from
How to decide the right type of action?
There are various options open before you. You may choose to consolidate your college loan or you may choose not to consolidate at all. In case of consolidation, you may choose federal lender or private lender. In case of not consolidating your loan, you will have to repay your college loans one by one. Then, you may have to work the repayment options with each of the lenders. Ask and you shall relieve. Most think twice about asking your lender about various aspects of negotiation. Whatever option you decide to choose, research all the various possibilities and then make the choice. Always take an informed decision.
| Archana Sarat is a chartered accountant who loves to write. To know more about student loans, log on to http://aboutstudentloans.org Article Source: http://EzineArticles.com/?expert=Archana_Sarat |
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