Student Loan Consolidation

[UNIGuy4Cy]

My wife is just finishing up school at UNI in May and I am looking to consolidate her loans. When I was at UNI, I just went to the financial aid office and they consolidated my loans through "Direct Loans." She is student teaching here in DSM and can't make it up to Cedar Falls before she graduates, so I wanted to take care of consolidating them. I really like having my loans through direct loans, without the financial aid office, how would I consolidate her loans through "direct loans," maybe online? Or are there other recommendations of who to consolidate through?

Thanks for the help!

[ISUAgronomist]

Here's the direct loans consolidation website. Very easy. They will take any federally backed loans but not private loans.

https://loanconsolidation.ed.gov/App...e/appindex.jsp

EDIT: They are going through software updates and will not process new applications until after the 16th.

[st8phan]

https://loanconsolidation.ed.gov/App...e/appindex.jsp

Just remember, do not consolidate your loans together!! While you hate to think about these things, if you consolidate both loans together and one of you dies; you will still be legally obligated to pay the full amount of both loans.

[ISUAgronomist]

https://loanconsolidation.ed.gov/App...e/appindex.jsp

Just remember, do not consolidate your loans together!! While you hate to think about these things, if you consolidate both loans together and one of you dies; you will still be legally obligated to pay the full amount of both loans.

This is very good advice.

[Cyforce]

My wife is a teacher in DSM and some of her loans were foregiven
because of her employment. Just wanted to give you a heads up
before you consolidated them.

[ISUAgronomist]

My wife is a teacher in DSM and some of her loans were foregiven
because of her employment. Just wanted to give you a heads up
before you consolidated them.

This too is good to check into. If she is going to teach in the hard to recruit areas (math, science, or low-income school district) the government will forgive loans based on the number of years you stay in that area (specifically low-income school district).

Here are the details:
http://studentaid.ed.gov/PORTALSWebA...ancelstaff.jsp

[tman24]

https://loanconsolidation.ed.gov/App...e/appindex.jsp

Just remember, do not consolidate your loans together!! While you hate to think about these things, if you consolidate both loans together and one of you dies; you will still be legally obligated to pay the full amount of both loans.

Would a life insurance policy pretty much take care of that? My life insurance policy is higher than what I owe even with final expenses. Or am I not thinking this through correctly?

[ISUAgronomist]

Would a life insurance policy pretty much take care of that? My life insurance policy is higher than what I owe even with final expenses. Or am I not thinking this through correctly?

Student loans, if only in one person's name, are cancelled by the lender in the event of their death and life insurance money would not have to be used toward paying them off. If all loans are in both people's names then the life insurance would obviously be used toward paying them off.

[GoCubsGo]

Student loans, if only in one person's name, are cancelled by the lender in the event of their death and life insurance money would not have to be used toward paying them off. If all loans are in both people's names then the life insurance would obviously be used toward paying them off.

I'm not sure student loans are entirely cancelled upon death. They are likely forgiven to the extent that the person does not have sufficient assets to pay them back, but I think it is inaccurate to just assume that you automatcially won't have to pay them upon death. Since most people have a negative net worth coming out of college this may be the case for a 23 year old, but likely not for someone in their 30s.

[st8phan]

I'm not sure student loans are entirely cancelled upon death. They are likely forgiven to the extent that the person does not have sufficient assets to pay them back, but I think it is inaccurate to just assume that you automatcially won't have to pay them upon death. Since most people have a negative net worth coming out of college this may be the case for a 23 year old, but likely not for someone in their 30s.

Believe me, I know first hand that federal Direct Loans are forgiven if the borrower dies. If they are in two people's names, they are not forgiven, unless of course both borrowers die.

[tman24]

Student loans, if only in one person's name, are cancelled by the lender in the event of their death and life insurance money would not have to be used toward paying them off. If all loans are in both people's names then the life insurance would obviously be used toward paying them off.

Alright that is what I figured. Good thing I went to State. My loans aren't that big.

[UNIGuy4Cy]

Thanks again everyone!

[UNIGuy4Cy]

My wife is a teacher in DSM and some of her loans were foregiven
because of her employment. Just wanted to give you a heads up
before you consolidated them.

Can she consolidate and still be eligible for loan forgiveness?

[Phaedrus]

Loan consolidation generally costs money. I hate paying money for convenience.

An alternative might be to list the loans from smallest to highest, and pay the minimum on all of them, except the smallest, which you put all your extra money into paying off as fast as you can. Once you pay that one off, you roll the amount you were paying on the one you pay off on top of the minimum on the next largest one.

If you consistently apply yourself, you'll be surprised at how quickly you can pay all your loans off.

[UNIGuy4Cy]

Could anyone please answer this question as it has been 4 years since I consolidated my loans, do you lose your six month grace period when you consolidate your loans through the below link?

https://loanconsolidation.ed.gov/App...e/appindex.jsp