Wife just got notified that she's eligible for this. She has some 5.x and 6.8% loans. I have some at 4, 6.8%, and 8.5%.

In the long run, this doesn't really matter too much since we're planning to pay off aggressively, but it's stupid to consolidate if you plan on paying more than you're required, right?

Instead of being able to pay off the 8.5s early, they're rolled into one with a weighted average rate. This would be in the 7s.

Scenario where we don't consolidate: every few months, throw 5-10K or so at an 8.5%, then a 6.8% after those are gone. The "weighted average" rate would be dropping over time from 7ish to somewhere around 4ish or 5 before we're done paying off completely.

Scenario where we consolidate: immediately all loans lumped together at weighted average of 7-something. IT would stay that way until all loans are paid off. But we get an immediate .25% interest rate reduction for consolidating. We already have a .25% rate reduction for autopay with each of our loans, so the .25% rate reduction promised by the DOE for this new program if you autopay wouldn't change our current situation at all.

So it's generally not a good idea to consolidate a situation where you plan to aggressively repay, right?

Third scenario: I haven't run the math yet, but it may make sense to consolidate only my wife's loans. Her 5ish loans are very small and the .25% interest rate reduction for consolidating her shit might actually make sense.

I'm more curious if my general analysis is missing any important point.

(http://www.autoadmit.com/thread.php?thread_id=1859952&forum_id=2#19852558)

I guess another Q is whether you can only consolidate some of your loan. It'd be baller to consolidate all of one interest rate's loans and git on dat .25% rate reduction tip.

(http://www.autoadmit.com/thread.php?thread_id=1859952&forum_id=2#19852582)