Well, the program officially started on 1-17-2012 with four different servicers for the Department of Education contacting eligible borrowers. I wonder if the new Consumer Finance Bureau is looking at the online application (the only way the customer can apply). It is a long, convuluted application with addenda at the end describing the "changes" applicable to the terms of the special direct consolidation loan.
Sometimes I am asked why the student loan business is so complicated. It's an easy answer -- because Congress makes up the rules. It's not just with this new program... other things need to be changed, too, to simplify the process.
As a taxpayer, I am not certain I am in agreement with this program. The customer (student loan borrower) consolidates, receives an immediate 0.25% reduction on the interest s/he is currently paying and gets a fixed rate for the term remaining on each of the loans. If the customer signes up to automatic withdrawals, s/he gets another 0.25% reduction. What's even better is if I have earned an incentive on my loan. It's a sweet deal but only for a limited population of customers.
It's a weird hybrid consolidation loan. Plenty enough for student loan borrowers to be confused about. You actually have to apply for and sign a new promissory note, but your terms on your individual loans don't change. Huh? you may ask. Welcome to my world.
Want more information, just search for special direct consolidation loan.
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