[Mo-facs] FW: OFS Financial Tip of the Week

Fri May 25 07:43:12 CDT 2007

________________________________

From: FeedBlitz [mailto:feedblitz at mail.feedblitz.com] On Behalf Of Dr.
Oleson - OFS Director
Sent: Friday, May 25, 2007 6:17 AM
To: Arendt, Cynthia
Subject: OFS Financial Tip of the Week

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 <http://financialsuccess.missouri.edu> 

University of Missouri-Columbia <http://www.missouri.edu> 
Personal Financial Planning Dept <http://pfp.missouri.edu> 
Dr. Mark Oleson - OFS Director
<mailto:financialsuccess at missouri.edu?subject=Financial%20Tip%20Blog> 

View Current & Prior Financial Tips <http://financialtip.blogspot.com> 
Summer
<http://financialtip.blogspot.com/2007/03/personal-finance-course-offeri
ngs.html> /Fall
<http://financialtip.blogspot.com/2007/04/personal-finance-course-offeri
ngs-fall.html>  - 1 Credit PFP Courses
<http://financialtip.blogspot.com> 

________________________________

<http://feedblitz.com/r.asp?l=2250404&f=85884&u=1165686> STUDENT LOAN
CONSOLIDATION - "What if my loan is sold?"
<http://feedblitz.com/r.asp?l=2250404&f=85884&u=1165686> 

I almost feel apologetic in writing on this topic since it seems I do it
so frequently; it is, however, one of the most commonly queried topics
(student loan consolidation) as well as one of the least understood/most
confusing issues. When consolidating federal loans (after graduating),
seek out the program that will save you the most money: Educational Loan
Company
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/http://www.educationalloancompany.com/our_benefits.
php> , North Carolina
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/http://financialsuccess.missouri.edu/stateprograms.
pdf> , The Loanster
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/http://theloanster.com/> , FinanSure
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/http://www.finansurestudentloans.com/consolidation.
aspx> , and Key Bank
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/https://www.key.com/html/H-1.39.html>  are examples
of programs that offer the best borrower benefits (depending on your
selected repayment strategy - see 4/25/2007 tip
<http://www.feedblitz.com/t.asp?/85884/1165686/http://www.feedblitz.com/
t.asp?/85884/1165686/http://financialtip.blogspot.com/2007/04/federal-st
udent-loan-consolidation.html> ). 

Many students become confused thinking they need to consolidate with
their existing lender or the Dept of Ed (in the event that's not their
lender) in order to get the benefits of "federal consolidation" -
neither case is true. You can consolidate wherever you want; and
regardless of the federal consolidation program you use, the loan will
always be regulated by the federal government (meaning your ability to
defer the loan, and the other benefits associated with a federal loan
will apply regardless of who you choose for your lender to be) ... Many
students have been asking the question "What if the lender sells my
loan?" The obvious concern is that I don't want to find a program with
good financial benefits that I will lose when/if they sell my loan to
someone else (an obvious [and common] bait and switch tactic). Asking
the question of whether a lender will sell your loan is the wrong
question to ask, however - the question you need to ask is whether or
not the lender will offer something in writing that will enable you to
keep the advertised benefits in the event that the loan gets sold to a
different lender. Ultimately, does it really matter who you're paying if
you're receiving the best benefits? I don't think so. I share the
example regularly of moving to Columbia about two years ago. When
shopping for a mortgage, my only real interest was in getting "the best
deal" (lowest interest rate; lowest loan fees). About two or three
months later, our loan was sold. Did that bother me? No. The rate that
we'd contracted earlier was established, so the only change was who
payments were made to. This is what you want to ensure with your federal
consolidation - don't be concerned about whether or not the lender will
sell your loan; rather, find out whether or not they will guarantee your
benefits in the event that it does get sold. 

NOTE. I'm sure several of you have already consolidated your loans, not
fully understanding the issues I just outlined (the primary irrelevance
of who your lender is [from the standpoint of deferment and other
general 'federal loan' benefits], or the vast difference in benefits
that companies may offer). Understand that if you're in your grace
period and the loan has not yet been consolidated [it is scheduled to be
done at the end of your grace period], you can likely "get out" of the
loan and reconsolidate elsewhere ... 

Dr. Mark Oleson (OFS Director)

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