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Consolidate Student Loan
If you have student loans other than Direct Loans,
you may want to apply for a Direct Consolidation Loan. Consolidation means
making only one monthly payment to cover all your loans. There may be several
advantages for you if you consolidate your student loans. Because the interest
rate will be the same as for Direct Loans, you may be able to pay less interest
than you're paying on your current student loans. You may be able to reduce your
monthly payments. You can also choose the repayment plan that best suits your
financial circumstances.
To consolidate student loans under Direct Loans, you must have at least one
Direct Loan or FFEL Program loan.
Listed below are the types of loans that may be consolidated:
Direct Stafford/Ford Loans (subsidized and unsubsidized)
FFEL Stafford Loans (subsidized and unsubsidized)
Direct and Federal PLUS Loans
Guaranteed Student Loans (GSL)
Federal Insured Student Loans [FISL]
Federal Supplemental Loans for Students (SLS)
Auxiliary Loans to Assist Students (ALAS)
Federal Perkins Loans
National Direct/Defense Student Loans (NDSL)
Health Professions Student Loans (HPSL)
Health Education Assistance Loans (HEAL)
Loans for Disadvantaged Students (LDS)
Nursing student loans
Direct and Federal Consolidation Loans You can consolidate your student
loans at any time--while you're still in school, during your six-month grace
period, or after you begin repayment. If you consolidate while you're in school,
you'll receive a grace period on your consolidation loan. Note that you can
consolidate only Direct Loans and FFELs while you're in school; the other types
of loans listed in this section may be consolidated only after you leave school.
If you want to consolidate while you're in school and you're attending a Direct
Loan school, you must have at least one fully disbursed Direct Loan or FFEL in
an "in-school" period. If you're attending a non-Direct Loan school, you must
have a Direct Loan, and you must have either a Direct Loan or FFEL in an
"in-school" period. An "in-school" period is the period before a loan enters the
grace period and while the borrower is enrolled at least half time at an
eligible school.
Note: If you want to consolidate during your grace period, wait to apply
until two months before the grace period ends. Repayment on consolidation loans
begins within 60 days of the first loan disbursement, which means your grace
period will be cut short if you apply too early.
If you have only FFEL Program loans, once you leave school you can consolidate
them under Direct Loans only if you can't get an FFEL consolidation loan, or you
can't get one with income-sensitive repayment terms acceptable to you.
Similar conditions apply to parents. They must have an outstanding balance on a
Direct PLUS Loan or a Federal PLUS Loan (under the FFEL Program). Parents must
not have an adverse credit history or, if so, must either document extenuating
circumstances or obtain an endorser for the loan who has no adverse credit
history. You may not be an endorser for your parent.
Even defaulted loans may be consolidated if you agree either to repay your
Direct Consolidation Loan under the Income Contingent Repayment Plan or make
satisfactory repayment arrangements (for consolidation purposes, defined as
three consecutive, voluntary, on time, full monthly payments).
Note: A married couple may consolidate their student loans jointly if at least
one spouse meets the requirements for loan consolidation. Both will be
responsible for repayment of the student loan, even if one spouse dies or they
separate or divorce.
For more information on student consolidation, contact your financial aid
office. |
