Loan Consolidation

Consolidation loans often make it easier for the borrower. Consolidation loans are available to a borrower that is in-grace or is repaying student loans. The loan limit amounts are determined by adding the balances of eligible education loans. The borrower is responsible for all interest and repayment of the loan. The maximum repayment period: up to 30 years. The interest rate is determined by the weighted average of the rates of all eligible loans rounded up to the nearest eighth of one percent, not to exceed 8.25%* fixed.

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Loan Consolidation Frequently Asked Questions

Q: Am I able to consolidate my student loan(s)?

Q: What loans are eligible to consolidate?
A: The following federal education loans are eligible for consolidation into a Direct Consolidation Loan:

Subsidized Loans:

• Subsidized Federal Stafford Loans
• Direct Subsidized Loans
• Subsidized Federal Consolidation Loans
• Direct Subsidized Consolidation Loans
• Federal Insured Student Loans (FISL)
• Guaranteed Student Loans (GSL)

Unsubsidized Loans:

• Unsubsidized and Nonsubsidized Federal Stafford Loans
• Direct Unsubsdized Loans, including Direct Unsubsidized Loans (TEACH) (converted
  from TEACH Grants)

• Unsubsidized Federal Consolidation Loans
• Direct Unsubsidized Consolidation Loans
• Federal PLUS Loans (for parents or for graduate and professional students)
• Direct PLUS Loans (for parents or for graduate and professional students)
• Direct PLUS Consolidation Loans
• Federal Perkins Loans
• National Direct Student Loans (NDSL)
• National Defense Student Loans (NDSL)
• Federal Supplemental Loans for Students (SLS)
• Parent Loans for Undergraduate Students (PLUS)
• Auxiliary Loans to Assist Students (ALAS)
• Health Professions Student Loans (HPSL)
• Health Education Assistance Loans (HEAL)
• Nursing Student Loans (NSL)
• Loans for Disadvantaged Students (LDS)

Ineligible Loans

Some loans are always ineligible for consolidation. While these loans may not be included
in a Direct Consolidation Loan, they may be considered in the calculation of the maximum
repayment period under the Graduated or Extended Repayment Plan. These include but are
not limited to the following:

• Loans made by a state or private lender and not guaranteed by the federal
  government

• Primary Care Loans
• Law Access Loans
• Medical Assist Loans

Q: What are the benefits to the borrower?
A: Direct Consolidation Loans allow borrowers to combine one or more of their Federal Education Loans into a new loan that offers several advantages.

Q: Do I have to pay any fees to consolidate?
A: No. Borrowers do not have to pay an origination fee or any other charges when obtaining a Consolidation Loan. Consolidation is free.

Q: Can I consolidate a defaulted loan?
A: Borrowers can consolidate most defaulted loans, provided they make satisfactory repayment arrangements (SRA) with the current loan holders or agree to repay their new direct consolidation loan under the Income Contingent Repayment Plan.

Q: Can I consolidate a loan that is with a collection agency?
A: Yes. As long as the loan is an eligible loan and meets satisfactory repayment arrangements (SRA).

Q: Can I consolidate private loans or credit cards?
A: No. Private institutional loans are not eligible for consolidation in the Direct Consolidation Loan.

Q: My account is currently past due. Can I consolidate?
A: Yes, we can offer past due borrowers a forbearance to consolidate in order to bring their account current and allow enough time to accomplish the consolidation. However, it is always better to keep your account current.

Q: If I have already consolidated my student loans, can I reconsolidate to lock in a lower interest rate?
A: Borrowers can not reconsolidate an existing consolidation loan by itself. The borrower may consolidate again, but only in the following instances:

• If the borrower obtains a new eligible loan after the date of the original consolidation loan was made, or
• If the borrower has at least one other eligible loan that was not included in the original consolidation loan.

Q: How long does the consolidation process take?
A: The consolidation process generally takes 60-90 days. Using Direct Loan Online Web application can reduce the amount of time it takes to consolidate a borrower’s loan.

Q: Can I consolidate a PLUS loan my parent took out for me with my Stafford Loans?
A: No. PLUS loans are taken out under the parent’s name and social security number while the Stafford loans are taken out under the student’s name and social security number. Therefore, each individual must consolidate separately.

Q: Can my spouse and I consolidate our student loans together under one loan?
A: Effective July 1, 2006, married couples with student loans are no longer allowed to consolidate their student loans together. However, loan consolidation may still be applicable on an individual bases if consolidation criteria is met.

Q: Can I prepay my consolidation loan at anytime without penalties?
A: Yes, borrowers may prepay their Consolidation loan at any time without penalty.