Student Loan Primer - Student Loan Blog by studentlsc.com

End of borrower benefits when consolidating student loans? We think other wise.

We at the Student Loan Service Center have had a number of inquiries about the ‘end of borrower benefits’ after the recent legislation (H.R. 2669 College Cost Reduction Act of 2007).

Contrary to the popular belief, the borrower will still be able to benefit by consolidating student loans.

Here is an example,

If you had $15,000 in federal student loans and have not yet consolidated your payment would be approximately $175.  Even without the borrower benefit rate reductions, you can reduce your payment down to $134.  You will save $41 or 24% reduction in payment!  Your credit will also benefit, from this consolidation. (We will have a posting on this later).

The borrower though will no longer be eligible for the on time payment rewards or the cash back options so prevalent in the student loan consolidation arena.