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College Loan Consolidation: How to be eligible.

A Direct Consolidation Loan allows you to consolidate (combine) one or more federal education loans into a new Direct Consolidation Loan for the purpose of lowering your monthly payment amount or gaining access to federal forgiveness programs.

Benefits of College Loan Consolidation

  • Single Loan With One Monthly Bill: If you currently have federal student loans that are with different loan servicers, consolidation can greatly simplify loan repayment by giving you a single loan with just one monthly bill.
  • Lower Monthly Payment: College loan consolidation can lower your monthly payment by providing access to additional income-driven repayment plans or by giving you more time to repay your loan (up to 30 years) if you choose the Standard or Graduated repayment plan.
  • Access to Income-Driven Repayment Plans: If you consolidate loans other than Direct Loans—such as FFEL Program loans or Federal Perkins loans—consolidation may give you access to additional income-driven repayment plan options, which can lower your monthly payment amount.
  • Access to Forgiveness Options: If you consolidate loans other than Direct Loans, consolidation may give you access to forgiveness options, such as income-driven repayment or Public Service Loan Forgiveness (PSLF).
  • Fixed Interest Rate: If you consolidate, you’ll be able to switch any variable-rate loans you have to a fixed interest rate. A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent.

Disadvantages of Consolidating

  • Longer Repayment Period: If you choose to repay your new consolidation loan on the Standard or Graduated plan, consolidation can increase the period of time you have to repay your loan, resulting in more payments and more interest overall than you would have if you didn’t consolidate.
  • More Interest: When you consolidate your loans, any outstanding interest on the loans you consolidate becomes part of the original principal balance on your consolidation loan, which means that interest may accrue on a higher principal balance than if you had not consolidated.
  • Loss of Certain Borrower Benefits: If you consolidate loans other than Direct Loans, you may lose certain borrower benefits—such as interest rate discounts, principal rebates, or some loan cancellation benefits—associated with your current loans.
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Eligibility

Most federal student loans—including Direct Loans and FFEL Program Loans—are eligible for consolidation. See the full list of loan types by selecting the arrow below.

What types of loans can I consolidate?

  • Subsidized Federal Stafford Loans from the Federal Family Education Loan (FFEL) Program
  • Unsubsidized and Nonsubsidized Federal Stafford (FFEL) Loans
  • FFEL PLUS loans
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)
  • Federal Insured Student Loans
  • Guaranteed Student Loans
  • National Direct Student Loans
  • National Defense Student Loans
  • Parent Loans for Undergraduate Students
  • Auxiliary Loans to Assist Students

Private education loans are not eligible for consolidation.

Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.

Am I eligible for loan consolidation while I am confined in an adult correctional facility or a juvenile justice facility?

If you are otherwise eligible, you can consolidate your federal student loans into a new Direct Consolidation Loan if you are incarcerated, as long as you are not a student at the time of consolidation.

When can I consolidate my loans?

Generally, you’re eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.

The loans you consolidate must be in repayment or in a grace period.

Can I consolidate an existing consolidation loan?

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Generally, you can’t consolidate an existing consolidation loan unless you include an additional eligible loan in the consolidation.

Bobby The Blogger News ( STAFF )

Bobby Amoah, also known as Bobby The Blogger, is a Ghanaian certified celebrity blogger and news publisher, freelance writer, Digital Marketer, YouTuber, social media marketer || E-Mail: editor@bobbytheblogger.com

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