The Anti-Consolidation

In the previous post I talked about federal loan consolidation and why you should avoid it. In this post I want to alert you on what to do with your student loans when you get out.

I have Nelnet for my loan servicing provider and when the loans were handed off to them, they formulated all my loans into 3 different groups.

This infuriated me. Within these three groups I had different loans with different interest rates. They, BY DEFAULT, consolidated my loans into 3 subgroups without even asking me. Why in the world would I ever want that? So I called my loan service provider and asked them specifically to break apart each of the loans, and voila!

I had anti-consolidated my loans! Now instead of a large 5.952% interest rate loan (group B) I broke them into smaller loans with 6.550% and 5.160% interest rates. In addition, instead of a 6.192% interest rate loan (group C) I had two loans with 6.550% and 5.960% interest rates. I did my own calculations and found that now that my loans are anti-consolidated (assuming I want to completely pay off my loans making 18k annual payments) I had shaved 5 years off my payment schedule. My advice in this situation is to look at the groupings of your loan, and before you accumulate any interest, specifically ask your service to break your loans apart if they have consolidated any of them for you.

Some of you may ask, does any of this even matter if you are planning for loan forgiveness? I will address this topic another time.