NEW YORK – If you’ve already used your one-time ticket to consolidate your student loans and you’re now stuck with a less than attractive rate, it pays to get creative.
That’s what Aubrey Riccardi, a 30-year-old attorney at a Manhattan law firm, did. After graduating from law school in 1999, she had accumulated more than $70,000 in student loans from various lenders. Because she wanted the ease of one payment, she immediately consolidated at the going rate: 7.5 percent. However, as interest rates started to plummet, her mailbox was deluged with alluring consolidation offers, none of which she was eligible for because you can consolidate only once.
Her solution? Riccardi’s parents took out a home equity line of credit, with a much lower, but variable, interest rate, which they used to pay off her loans. Now, she pays her parents monthly, and the savings have enabled her to apply money to the loan’s principal each month, which cut the life of the loan from about 25 years to eight.
Riccardi is one of many graduates who have already consolidated their loans — converting their variable-rate loans into fixed-rate ones — but who are bogged down by the high interest rates they’ve locked in. Though options are limited, there are some alternatives for debt-laden grads to consider.
For this complete story, please visit Students Get Creative to Pay Off Loans.
