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Federal Consolidation Loans allow borrowers to combine any number of existing federal educational loans into a single, more manageable loan.
Most federal educational loans are eligible for consolidation, including subsidized and unsubsidized FFELP and Federal Direct Loan Program Stafford and PLUS Loans, SLS, Perkins Loans, FISL, Nursing Student Loans, Health Education Assistance Loans, and Health Professions Student Loans.
Private/alternative loans are not eligible for federal consolidation.
Repayment of consolidation loans begins within 60 days of disbursement. Repayment terms can be extended from 10 years up to 30 years, based on the amount consolidated and the repayment option that you choose.
There are multiple options for consolidation. A borrower may consolidate :
Loan(s) in grace period or in repayment status.
Loan(s) in deferment, forebearance, delinquency or default. Borrowers with defaulted loans must first establish a satisfactory repayment arrangement with the loan holder or an agreement to repay the consolidation loan under an income sensitive FFELP plan or income contingent repayment Direct Loan plan.
FFELP Consolidation or Direct Loan Consolidation loans with one or more additional loans. For defaulted consolidated loans, the borrower must first establish a satisfactory repayment arrangement with the loan holder or an agreement to repay the consolidation loan under an income sensitive FFELP plan or income contingent repayment Direct Loan plan.
A single Direct Loan Consolidation loan.
A single FFELP Consolidation loan only if the loan is delinquent, defaulted, or included in an adversary action in a bankruptcy proceeding for loan discharge.
Perkins and/or Health Professions loan(s) into a FFELP Consolidation loan.
Perkins and/or Health Professions loan(s) into a Direct Consolidation loan only if at least one FFELP or Direct Loan is included in the consolidation.
If you have at least one Federal Direct Loan, or have been unable to obtain a Federal Consolidation Loan for your FFELP loans, you may be eligible to apply for a Direct Consolidation Loan.
For Federal Consolidation Loans, the fixed interest rate is the weighted average of the interest rates in effect on the loans at the time that you consolidate, rounded to the nearest higher 1/8th of one percent. The interest rate may not exceed the maximum rate of 8.25%.
Your lender(s) can provide more information about consolidating your loans and help you determine if and when consolidating might be the right option for you.
The U.S. Department of Education (ED) and the Federal Trade Commission (FTC) offer Student Loans: Avoiding Deceptive Offers, which is a free consumer guide for college students (and their families) seeking new loans or consolidating existing loans.
If you have questions about the number of loans you have borrowed, the amount of each loan, or your outstanding balance(s), check with the National Student Loan Data System (NSLDS).
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