What are the benefits of consolidating my loan? Back to Top
Consolidating student loans will put all your existing loans into the Federal Direct Loan Program with the Department of Education. You will only have to worry about one payment instead of multiple payments. This makes it easier to manage your debt. Further, within this program there are options that can help make payments more affordable to certain borrowers and may forgive some portion of the loan balance at the end of the loan term.
Will my payment be reduced? Back to Top
In many cases yes, your payment in the new consolidated loan can be lower than your current payment. There are multiple plans to repay your student loan, one of which is the Income Based Repayment Plan. This allows your payment to be based on your annual income, which often times will allow you to qualify for a very small payment and in some cases even a payment amount of zero.
Is there a minimum or maximum loan amount that qualify? Back to Top
Can I defer my payments? Back to Top
Possibly. Once you are consolidated you may qualify to renew your deferment options.
Will I retain my subsidy benefits? Back to Top
Borrowers will be able to retain their benefits on subsidized loans when consolidated into the subsidized portion of a consolidation loan.
Am I eligible for a Direct Consolidation Loan? Back to Top
Borrowers must have at least one Direct Loan of Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default status to qualify. Loans that are in-school status cannot be included in the Federal Loan Forgiveness Program.
If you are in default, you can consolidate under the Income Contingent Repayment Play or Income Based Repayment Plan.
If you are already consolidated but have one loan which is not, you can add that one loan into the consolidation.
Can consolidate my loans or apply for government programs myself? Back to Top
Yes. You can certainly contact the Department of Education and see what programs you qualify for and apply. We find that many consumers prefer to work with our company since we have expertise work on their behalf to educate them about the programs available to them and streamline the process to get them in the pest programs for their situation.
Can my PLUS Loan be consolidated? Back to Top
Yes, PLUS loans can be consolidated.
Can I consolidate my Perkins Loan? Back to Top
Yes you can consolidate your Perkins Loan into the Direct Consolidation Loan if you include at least one Direct Loan or Federal Family Educational Loan (FFEL). Perkins Loan cannot be included by themselves. There are some disadvantages to consolidating your Perkins Loan so you should consider them prior to consolidating them.
• You will lose your cancelation benefits, such as performing public services.
• Your grace period may be lost.
• Interest Does not accrue when your Perkins Loan is in deferment.
• Perkins Loans generally have lower interest rates but less flexible repayment periods.
Can I consolidate health professions loans? Back to Top
Yes, you can consolidate certain health professions loans sponsored through the U.S Department of Health and Human Services with other Federal Education Loans. You must still include at least one Direct Loan or Federal Family Education Loan to qualify.
Eligible Health Professions:
• Health Professions Student Loans (HPSL)
• Health Education Assistance Loans (HEAL)
• Loans for Disadvantaged Students (LDS)
• Nursing Student Loans (NSL)
Benefits of consolidating these loans would include lowering your monthly payment, having a longer repayment period, and having one single monthly payment.
Can I consolidate if I am currently enrolled in school? Back to Top
Yes but with certain conditions. Borrowers cannot consolidate loans that are an in-school status, but borrowers can still consolidate loans that are in grace, repayment or deferment.
I am already consolidated, can I consolidate again? Back to Top
Yes, as long as you are including at least one other FFEL or Direct Loan into the new consolidation.
Can I consolidate my loans that are in grace? Back to Top
Yes, you can consolidate loans that are in grace however you will lose any of your remaining grace period.
Can I delay my application so I don’t lose my grace period? Back to Top
Yes, you can delay your application to take full advantage of your grace period but you indicate you wish to do this on your application.
Can I consolidate my defaulted loan? Back to Top
Yes, as long as you agree to pay under either the Income Contingent or Income Based Repayment Plan, OR make satisfactory repayments with your current loan holder.
You cannot consolidate a default loan if a judgment has been issues against a defaulted loan which has not been dismissed.
Click here for more information on defaulted loans
Will consolidating clear the default notation from my credit? Back to Top
No, if you want to clear the default notation, you will need to contact your loan holder to discuss rehabilitation with them. If you decide to consolidate while in default, your default notation in your credit will also show that the loan was paid off in full. This notation will remain on your credit history for seven years.
What are the repayment plans? Back to Top
There are several repayment plans in the Federal Loan Forgiveness Programs:
• Standard Repayment Plan
You will pay a fixed amount each month until your loans are paid in full. Your monthly payment will be at least $50 for up to 10-30 years, based upon your total education indebtedness (loan amounts).
• Graduated Repayment Plan
Your minimum payment amount will be at least equal to the amount of interest accrued monthly. Your payments start out low, and then increase every two years for up to 10-30 years and is based on your total education indebtedness (loan amounts).
• Extended Repayment Plan
To be eligible, your Direct Loan balance must be greater than $30,000 and you will have up to 25 years to repay your loans. You have two payment options:
– Fixed Monthly Payment Option: You will pay a fixed amount each month until your loans are paid in full.
– Graduated Monthly Payment Options: Your minimum payment amount will be at least $50 or the amount of interest accrued monthly, whichever is
greater. Your payment start off low and then increase every two years.
• Income Contingent Repayment Plan (ICR)
Your monthly payments will be based on annual income, Direct Loan balance, and family size. They are spread over a term of 25 years.
• Income-Based Repayment Plan (IBR)
Your monthly payments will be based on your annual income and family size, and spread over 25 years. You must be experiencing a partial financial hardship to initially select this plan and once you select this plan you cannot change to any other plan except standard.
For more in-depth information on the repayment plans, please see our Repayment Plans page
Can I later on change my repayment plan? Back to Top
Yes, most borrowers can change their repayment plan at any time once consolidated. Borrowers who are in the ICR plan must make at least 3 consecutive payments into the Direct Consolidation Loan account before changing to another plan. There is no limit to how many times you can change. Borrowers in the IBR plan can only change into the Standard Repayment Plan.
How long does It take to consolidate? Back to Top
It generally will take 60-90 days to consolidate from when the lender has received your application for consolidation.