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Frequently Asked Questions - Loan Consolidation
Can I consolidate my Stafford loans while I’m still in school?
No, the Higher Education Reconciliation Act of 2005 has eliminated the provision that allows a Stafford borrower who is enrolled in school at least half-time to request to enter repayment early.Top
If I consolidate my loans after October 1, 1998, can I have them cancelled through the Teacher Loan Forgiveness Program?
If you had taken out your first federal student loan after 10/1/98, then FFEL and Direct loans that are included in your consolidation are eligible for cancellation under the Teacher Loan Forgiveness Program. Keep in mind; Perkins loans that are consolidated lose their Teacher Cancellation Benefit.Top
If a married couple consolidated their loans, and one of them dies, can the Consolidation Loan be discharged?
The entire Consolidation Loan would not be discharged. However, the portion of the outstanding balance of the consolidation loan attributed to the spouse who died would be discharged.Top
Can I consolidate a defaulted loan?
Yes, as long as there is no judgment or wage garnishment in effect, and you make satisfactory repayment arrangements with the holder of the loan or the consolidating lender agrees to make the consolidation loan under an income-sensitive repayment plan.Top
Is there an 18.5% fee to consolidate my defaulted loans?
No, there are no fees charged to consolidate your loans. If you are consolidating loans that are in default, any collection costs may be added to the principal balance of the Federal Consolidation Loan. This addition may not exceed 18.5% of the outstanding principal and interest on the loan.Top
How can I find a lender to consolidate my loans?
The current instability of FFEL has caused many lenders to reexamine participation in the Federal Consolidation Loan Program. As a result, borrowers may have difficulty finding a participating lender. If after careful consideration of the pros and cons of consolidating your loans consolidation is the best option for you, contact your lender or apply for a Federal Direct Consolidation Loan through the U.S. Department of Education.Top
If I have one Direct loan and one FFELP loan, can I go to any lender to consolidate my loans?
You have the choice of consolidating your loans either through the Direct Loan Consolidation program or the FFEL Consolidation Program.Top
How is the interest rate on a consolidation loan determined?
The interest rate is determined by taking a weighted average of the loans being consolidated, rounded up to the nearest one eighth of one percent, not to exceed 8.25%. If a HEAL Loan is included, the interest for the HEAL Loan will be a variable amount determined by the average of the bond equivalent rates of 91 day Treasury bills auctioned for the quarter ending June 30, plus 3.0%.Top
May a parent loan borrower consolidate his Federal PLUS (FPLUS) loans for three different children in order to obtain a longer repayment period?
Yes, the parent may consolidate all FPLUS loans that have been fully disbursed into one consolidation loan. The maximum repayment term will be based on the new combined balance.Top
Can I reconsolidate my FFELP consolidation loan?
You cannot reconsolidate your existing FFELP Consolidation loan into another FFELP Consolidation loan. However, you can obtain a new FFELP Consolidation loan if with your existing consolidation loan you include a federal student loan you obtained after the date of your existing consolidation loan or you include an outstanding federal student loan that you did not include in your initial consolidation loan. Contact your lender if you have any other questions.Top
What if I forgot to include a loan for consolidation?
You can request to have an eligible loan added to your existing consolidation loan, provided the request is made within 180 days from the date the consolidation loan was made.Top