Consolidation loans are designed to help borrowers simplify loan repayment by allowing borrowers to combine several types of federal loans with various repayment schedules into one loan.
Loans that can be included in consolidation are: Unsubsidized Stafford, Subsidized Stafford, PLUS and Perkins. (NOTE: Private Education Loans are not included.)
The interest rate is calculated by taking the weighted average of the loans being consolidated and rounding up to the nearest 1/8%(capped at 8.25%). This calculated rate is then fixed for the remainder of the repayment period.
Once you graduate or choose to no longer attend school on a half-time basis, you may contact the Direct Loan (DL) Program for an application for a Direct Consolidation Loan, which will combine FFEL (Family Federal Education Loan) Program and DL loans into one loan. When it is time to begin repaying the loans, you will be provided with several repayment and consolidation options. For more information, call the U.S. Department of Education Consolidation Department at 1-800-557-7392 or visit www.loanconsolidation.ed.gov
If you have borrowed loans from the Family Federal Education Loan (FFEL) Program as well as the Direct Loan (DL) Program and have chosen not to consolidate your loans:
Your lender will send information about repayment and notify you of the date repayment will begin. Under the FFEL Program, you will repay a private lender, or a designated loan servicer, that made the loan. Under DL, payments are made to the Direct loan Servicing Center. You will make separate monthly payments to each servicer. It is recommended that you visit the National Student loan Data System (NSLDS) Student Access website at www.nslds.ed.gov NSLDS is a central database for student aid and will provide additional information on your student loans. (You will need your FSA ID to access the website.)