Students with multiple loans save money with consolidation

Students who have multiple loans through different service organizations don't have to worry about making several loan payments.

There is an option for students who want to simplify their financial responsibilites -- they can consolidate their loans.

For those who don't know what exactly consolidation entails, Robert Zellers, director of the Office of Scholarships and Financial Aid, gave a clear definition for consolidation.

"If a person has several different loans from different places, they can put those loans together through one servicer to save money," he said.

Consolidation, however, is not refinancing, as one would do one a house mortgage. In fact, there is no way to refinance a student loan because that option has never been available.

One of the benefits of loan consolidation is the possibility of getting a lower interest rate as a result of merging loans into one payment instead of several.

Zellers said interest rates for student loans have decreased during the last four years because of the current economy.

The current interest rate for student loans is a little less than 6 percent for subsidized and unsubsidized loans, as opposed to four years ago when it was more than 8 percent.

"This is an incredibly low rate," Zellers said. "It's never been this low in all of history."

Zellers said a new bill was just passed in Congress to have a fixed rate of interest for federal student loans, the number being 6.8 percent. This measure will go into effect in 2006.

Students cannot consolidate through Ball State. They must research their options with their loan provider.

Zellers said Ball State gives out the loans through the government, and the university is not in charge of making arrangements with students to consolidate loans. Instead of Ball State being responsible, banks and lenders make those arrangements with students.

Ball State's financial aid office does, however, help students determine if consolidation of their loans would be wise, but it is up to students to do more research beyond what advice the office might give.

"Students with direct loans find their options are better if they consolidate through the Department of Education," he said.

Some other servicers include Sallie Mae and EFS Services located in Indianapolis.

According to the Sallie Mae Web site, they have been helping students with loans for more than 25 years. They are the leading provider of student loans in the nation, serving more than five million borrowers.

The Web site for EFS Services allows students and their parents to apply online, make payments and look up information concerning their accounts. There is also a toll free number to set up an account as well, which is 1-800-635-1867.


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