The Student Loan Debt Forum | The College Investor

Hello,

I have 2 FFEL loans totaling about 42000. Loans were taken out in 1992 and are locked in at 8%. At this point would it be worth consolidating into a direct federal loan? Would I be able to get a lower rate? Would these enable me to qualify for a portion to be canceled as currently being proposed in congress or freezing interest accumulation under Cares Act? Unfortunately for many years I made payments but did not pay attention to balance. After taking a closer look I found that my payments were only covering interest and sometimes not even that. My balance has actually increased. I am paying $283 per month and can really pay an extra $50 per month. A little late to be asking but would appreciate any recommendations.

Thanks
David
 

Maybe...

It's tough to say because, depending on your repayment plan currently and when you started it, you could be close to loan forgiveness as it stands (IBR allows for loan forgiveness after 25 years). If you change your loans, you reset your clock...

With that said, here are the answers to your questions:

At this point would it be worth consolidating into a direct federal loan?

Maybe, see above.

Would I be able to get a lower rate?

You would get the current rate on loans, which is better than what you're paying. But the interest rate doesn't really matter in your situation as you're focused on loan forgiveness. The real goal is to pay as little as possible then get loan forgiveness.

Would these enable me to qualify for a portion to be canceled as currently being proposed in congress or freezing interest accumulation under Cares Act?

We don't know, but I would guess it would only apply to Direct loans, not to FFEL Loans.