Consolidate Student Loan
Consolidate Student Loans
For the most part, all federal student (and parent) loans are eligible for consolidation. Eligible programs include subsidized and unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins Loans, Federal Nursing Loans, and Health Education Assistance Loans. Graduates and parents with PLUS loans can also consolidate their student loan debt.
To consolidate student loans, there are a few rules.
Students carrying student loan debt no longer have the option of consolidating their loans while in school. The Higher Education Reconciliation Act of 2005 discontinued the provision that allowed a Direct Loan or FFEL borrower to enter into early repayment. This rule applies to all FFEL and Direct Stafford Loan borrowers. Borrowers who are attending school below part time can qualify opt to consolidate student loans.
PLUS loans must be fully disbursed before they can be consolidated.
To gain approval for a consolidation, the borrower cannot be in default or be delinquent on any of their student loans. There may also be other criteria for approval that can be obtained through the loan holder.
If you want to consolidate student loans, but your lender does not offer an income sensitive repayment plan, you can apply for a Direct Consolidation Loan. This loan offers an income contingent repayment plan. You must qualify for the repayment plan to qualify for the consolidation. If one or more of a borrower’s loans are from the FFEL program, he or she can apply for a consolidation through the loan holder or the Direct Consolidation Loan Program. This same theory applies to students holding one or more Direct Loans.
Borrowers who file for and obtain a FFEL Consolidation Loan or Direct Consolidation Loan during their grace period are encouraged to wait until the end of the period because the grace period will terminate upon approval of the consolidation.
To learn more about how to consolidate student loans, visit the student loan consolidation section at Student-Loans.net