Student Loan Consolidation FAQ

Q1: What is a Federal Consolidation Loan?

A: A Federal Consolidation Loan is a loan that repays some or all of your outstanding eligible federal student loans, and replaces the multiple payments you may be making each month with a single student loan payment. In most cases, your repayment term is extended to make your monthly payments more affordable, however, you may always prepay your loan with no penalties. The interest rate on the consolidation will be a fixed rate for the entire term equal to the weighted average interest rates of your consolidated student loans rounded up to the nearest 1/8% not to exceed 8.25%.

Q2: Student loan consolidation sounds too good to be true. Is this another debt consolidation scam?

A: Absolutely not! The Federal government created the student loan consolidation program to help students and their parents afford higher education, so that our youth is better educated and can achieve higher earning power. Like many government programs, however, some of the rules and procedures may be a bit complicated. That's why you're encouraged to let StudentLoanConsolidation.name find your student loan consolidation provider of choice!

Q3: How do I know if I'm eligible to consolidate my student loans through StudentLoanConsolidation.name?

A: You are eligible if ALL the following are true:    * You have graduated, left school, or are currently attending school either full-time or less than half time, and your loans are in repayment, deferment/forbearance or in grace.    * You have at least $10,000 in eligible student loans you wish to consolidate    * You can certify that you do not have a Federal Consolidation Loan application pending with another lender.

Q4: What's the minimum balance to consolidate though StudentLoanConsolidation.name?

A: You must have an outstanding balance of $10,000 in eligible student loans to consolidate them under this program.

Q5: What loans can I consolidate?

A:Federal and Federal Direct Stafford (subsidized and unsubsidized), Federal and Federal Direct PLUS, SLS (Supplementary Loans for Students)

Federal Perkins, Federal Nursing Student Loans (NSL), Federal Health Education Assistance Loan (HEAL), Federal Health Professional Student Loans (HPSL), Health Professions Student Loans (HPSL), Loans for Disadvantaged Students (LDS), Federal Insured Students Loans (FISL), Federal Consolidation Loans, Federal Direct Consolidation Loans. A note about defaulted loans: You may consolidate defaulted loans as long as you make three consecutive monthly payments to your guarantor prior to applying for loan consolidation.

Q6: I have several student loans, but I also have bad credit. Can I still consolidate my student loans?

A: Bad credit, poor credit? No problem! There are no credit checks and no co-signers required for student loan consolidation. We work solely with the student loans you own, and nothing else.

Q7: What if I have already consolidated my student loans. Can I reconsolidate to lock in the lower rate?

A: If you have already consolidated, the Department of Education has ruled that you cannot reconsolidate unless you either received a new eligible loan since the consolidation or have left an eligible loan out of the original consolidation. An existing consolidation loan with no other eligible debt may be able to be refinanced or reconsolidated through our repayment discount program.

Q8: How do I get the lowest student loan payments available today?

A: Make your required number of scheduled payments (within the first 15 days of the due date each month) on your new consolidation loan, and we'll automatically reduce your interest rate by one full percentage point and leave it there as long as you continue to make on-time payments. Pay electronically (direct debit payments from your checking or savings account) and you can reduce your interest rate by an additional .25 of a percentage point, as long as you continue to make your payments electronically. When you qualify for both benefits, you can reduce your interest rate by 1.25% and save hundreds, even thousands of dollars on your total loan costs.

Q9: Is there a credit check?

A: No credit checks are required to consolidate your loans.

Q10: How long will it take for me to repay my loans if I consolidate?

A: Depending on the outstanding balance on your federal student loans (even those you may wish to leave out of the consolidation), you may have up to 30 years to repay your student loans: Important note about your repayment term: You may choose a repayment term that is shorter than the ones noted above.

Q11:What are my repayment options?

A: You may choose from the following repayment options: Level Repayment Plan - your least expensive option. Payments are fixed over the life of the loan and repay all principal and interest due each month.
Graduated Repayment - can reduce your payments by more than 50% because you make small, interest-only payments at the beginning of repayment, and larger payments later on, when you may be in a better position to afford them. You may choose from the following graduated repayment plans:   

• 2 Year Graduated Repayment Plan - Interest-only payments for the first two years, followed by level payments for the remainder of the term.
• 4 Year Graduated Repayment Plan - Interest-only payments for 2 years followed by 2 years of payments that include interest and a portion of principal, followed by level payments for the remainder of your term.
• Extended Repayment - Extends repayment up to 25 years, if you have balance between $30,000 and $39,000 in eligible student loans.

Q12: Do I have to extend my terms when I consolidate?

A: Absolutely not! You can keep your payments and the terms the same. Also, you can customize it as low as 5 years (60 months). Keep in mind, there is no prepayment penalty.

Q13: Can I switch my repayment option later on?

A: Yes.

Q14: What are the benefits of applying during a grace or deferment period?

A: When you apply for loan consolidation during a grace or deferment period (authorized time periods when payments are not due), you are eligible for a further reduction of your consolidation loan interest rate. That's because during these periods, your variable Stafford loan interest rate is .6% lower than during active repayment. If you wish to take advantage of this opportunity, check the appropriate box on your student loan consolidation application.

Q15: Do I get a grace period on my consolidation loan?

A: No, once you have been notified that your consolidation loan has been disbursed, you will begin repayment within 30 days.

Q16: What about the subsidy on the Stafford loans I'm consolidating?

A: Borrowers who are eligible for interest subsidies on their underlying Stafford loans will continue to receive subsidy benefits on the portion of the consolidation loan that repays the original subsidized Stafford loans.

Q17: Can I consolidate with my spouse's loans? Are spousal or joint spouse consolidation loans a good idea? 

A: Yes, you may consolidate your eligible student loans with the eligible student loans of a spouse. However, it may not be in the best interest for married couples to consolidate their loans together because should your spouse die, become permanently disabled, deferred his or her loans, or divorce, you as the other spouse would be still be responsible for payment of the entire consolidation loan amount. Therefore, each spouse should separately consolidate his or her student loans into their own consolidation loan to minimize risk. There can still be only one monthly bill for the two consolidated loans, for added conveninece at no additional charge.

Q18: What do I do while my loans are being consolidated?

A: Continue to make regular monthly payments on your student loans! If they become delinquent or go into default, your consolidation loan will be delayed.

Q19: Who will I pay each month?

A: Once your loans are consolidated, you will receive a payment book containing all the information you will need about your new loan servicing center.

Q22: I attended graduate school, am I still eligible?

A: Yes, as long as you have eligible loans you wish to consolidate. Most people who have attended graduate school have borrowed more for their education, and so have more to save by consolidating. Student Loan consolidation can help you lock in a very low interest rate, cut your payments by more than half and let you make a single payment for all your eligible student loans.

Q23: I'm still in school. Do I need to wait until I graduate before I can consolidate my student loans?

A: Not necessarily! If you are in graduate school, you can consolidate your undergraduate school loans. If you're in a post-graduate program, such as medical school or law school, you can consolidate your undergraduate and graduate school loans! If you have already consolidated your undergraduate loans, and are about to leave graduate school, you may be eligible to consolidate both undergraduate and graduate loans into one payment!