Consolidation Information
Office of Financial Aid

What loans can be consolidated?

• Federal Family Education Loans (FFEL) and Direct Loans, including:

• Stafford
• PLUS
• SLS
• Consolidation

• Perkins
• Health Professions Student Loans
• Nursing Student Loans
• health Education Assistance Loans (HEAL)
• Federally Insured Student Loans (FISL)

Alternative loans are not eligible to be included in a Federal Consolidation loan

Pros

• Consolidation may lock the borrower into a lower interest rate
• Consolidation can allow the borrower to bring together loans from multiple lenders for a single repayment schedule (i.e., one monthly payment)
• Consolidation may allow the borrower a longer repayment period, which will reduce the amount of the borrower's monthly payment

Cons

• Consolidation may lock the borrower into a higher interest rate
• Consolidation may increase the total cost of the borrower's loan
• The borrower may have to forfeit all or a portion of his or her grace period
• The borrower may lose certain borrower benefits

• Certain deferments may be lost; however, borrowers retain their ability to request most major deferments after consolidation
• Borrowers who consolidate Perkins loans lose deferment subsidy and cancellation eligibility

Loan Consolidation Worksheet

1. Call your lender and request that your variable rate loans be placed in repayment status and then immediately into "deferment status" as you are continuing in school. Act right away, the deadline to lock in the current interest rate is June 30, 2006.
2. Apply for a federal consolidation loan for your variable rate loans that have been converted to repayment status and then placed in "in school" deferment you should be able to lock in a consolidation rate. Other discounts could reduce that rate, if your lender offers additional discounts.
3. Since your consolidation loan will be in an "in-school" deferment status, you should not be required to make payments till you leave school or graduate.
4. You can continue to borrow to pay for college and you can consolidate additional loans in the future, either as a separate consolidation or as an add-on to the current consolidation.
5. When you finally leave school, the consolidation loan that you are making now will no longer have a grace period, and you will be expected to start repayment unless you qualify for an unemployment or hardship deferment, or unless you request and receive a forbearance.

1. Call your lender and request that your variable rate loans be placed in grace status!!!! act right away the deadline for the current interest rate is June 30, 2006.
2. Apply for a federal consolidation loan for your variable rate loans that are in grace status lock in the lowest rate possible that your lender makes available to you while your loans are in grace status.
3. Once your consolidation loan is completed, your lender may start billing you right away, unless you are eligible for a deferment (because your are attending to graduating or professional school in the fall) or unless you request a forbearance, (to postpone all or portions of your repayment installment till you are earning enough to afford the payments).
4. You can continue to borrow in the future to pay for graduate or professional school and you can consolidate additional loans in the future, either as a separate consolidation or as an add-on to the current consolidation, but subsequent consolidations will be at the weighted average of the interests rates associate with the underlying loans that are in effect at the time, rounded up to the nearest 1/8th.
5. When you have exhausted any grace periods for which you are eligible, you will be expected to start repayment unless you qualify for an unemployment or hardship deferment, or unless you request and receive a forbearance.