Student Loan Network

I applied for a studen loan consolidation in June 2005 prior to the July 1, 2005 interest rate hikes. I applied with the Student Loan Network. The lock in rates, which were also noted on the promissary notes were well under 4%. I was not to begin payment until November 2005. Unfortunately this did not happen.

I contacted the Student Loan Network in November, and was informed that I should wait until December to see if the loans went through. I again contacted SLN in December, however this time I was told that the Loan Verification Certificates (LVC) from each of my student loans had to be reordered and again wait until January 2006. By this time I was no longer in the grace period and was paying at a much higher interest rate. This pattern has since continued.

I did contact an Ombudsman with the Department of Education, in April, 2006. He has assisted in getting my loans consolidated, with payment commencing this July 2006. However, I am paying at a 5.125% rate versus 3.65%. This may not seem like much, but with my loans nearing $50,000, the interest difference over the life time of the loan is rather significant, anywhere between 10,000 to 15,000 dollars. My new consolidation is with Great Lakes, albeit, SLN is still my contact. I have been told by the Ombudsman and SLN that the original interest rates will be honored, however, Great Lakes doesn't want to honor those rates.

Had everything consolidated on time, I would have been paying at the 3.65% rate beginning in November 2005. Additionally, since I am direct-debiting from the bank, I am entitled to an additional .25% reduction. I am currently paying 5.125% with the reduction equalling 4.85%. I haven't done the math, but I can tell I have lost money due to the additional interest. Moreover, I am entitled to a 1% reduction upon 36 consecutive payments. Since my loans were not consolidated until this July, my 36 months have just begun. Therefore, I will have lost out on 8 months toward this 1% reduction.