- Jim
------- Forwarded Message
A message from J. DeWayne Green in the Office of Research and Graduate
Studies about how to dramatically reduce your Student Loan Debts by taking
advantage of a law recently enacted in Congress:
Most of our graduate students needed and may still need federal loans to
finance their undergraduate and/or graduate education. However, most
probably don't know about a law just passed by Congress giving them a chance
to cut back on the total dollar amount of payments they are scheduled to pay
over the life of their loan. Essentially, graduate students would be taking
advantage of today's lower interest rates by 'refinancing' their prior
student loans. But they need to know this in a hurry because their window
of opportunity is small. The deadline for applying is January 31, 1999.
This limited option is available because last week Congress passed the
Higher Education Amendments (HEA) of 1998, which has now been signed into
law by President Clinton. It allows student loan holders to apply for a
consolidation loan from the Department of Education's direct loan program
at an interest rate of 7.46 percent. This rate is significantly lower than
the existing rates on most student loans. Although the interest rate on a
consolidated adjustable loan would be adjusted annually, it would be based
on a lower interest rate formula for the entire life of the loan. The
Department of Education has estimated that most students who consolidate
their existing loans would save, on average, about $500 per $10,000 of
debt (principle balance) on a 10-year loan.
For borrowers still in school, the new rate is only available to students
who hold only direct loans. (Loans acquired via UCI's Financial Aid Office
are considered to be federal direct loans). A student who holds a mix of
other kinds of student loans would not be eligible. Please visit DOE's
website for further clarification on this point.
For graduates with existing loans interested in this special program, the
following parameters will apply:
1) At least one Department of Education Direct Loan or Federal Family
Education Loan must be included in the consolidation.
2) There is no consolidation fee or minimum balance.
3) A loan holder can consolidate a single loan, an existing direct
consolidated loan, or several loans.
4) A loan holder can choose some subset of his/her loans to consolidate
or may choose to consolidate all loans.
Any graduate students who believe they may be eligible for this special
program can obtain more information and an application by contacting the
Department of Education Direct Loan origination center directly at
1-800-557-7392 or via DOE's website at http://www.ed.gov/DirectLoan
I hope this information is helpful to you and our Graduate Students and will
save them some cash. Thanks for getting the word out on this.
J. DeWayne Green
Assistant Graduate Dean
Research & Graduate Studies
------- End of Forwarded Message