An Overview of Student Loan Debt Consolidation
A student loan debt consolidation loan allows you to combine your federal student loans into one loan with one monthly payment. The repayments of a student loan debt consolidation loan can be significantly lower than the payment required under the standard 10-year repayment option. Under the Federal Family Education Loan (FFEL) Program, banks, secondary markets, credit unions, and other lenders provide the student loan debt consolidation loan. Under the William D. Ford Federal direct loan (Direct Loan) Program, the federal government provides the student loan debt consolidation loan.
Private education loans aren't eligible
Most federal education loans are eligible for inclusion
in a student loan debt consolidation loan, including subsidized and
unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins Loans,
Federal Nursing Loans, and Health Education Assistance Loans. However, private
education loans aren't eligible for inclusion in a student loan debt
consolidation loan.
How to know which loans are eligible?
To find out which loans can be included in a
student loan debt consolidation loan contact the Loan Origination Center’s
Consolidation Department if you're applying for a direct student loan debt consolidation
loan. Contact a participating FFEL lender if you're applying for an FFEL
student loan debt consolidation loan.
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It is worth noting that you are still eligible
for a student loan debt consolidation loan after you graduate, leave school, or
drop below half-time enrollment. you can also get a student loan debt
consolidation loan while you’re in school. You must, however, be attending at
least half time and have at least one loan or FFEL in an in-school period which
generally means that you have been continuously enrolled at least half time
since the loan was disbursed. There are a number of conditions that need to be met
for you to qualify for a student loan debt consolidation loan, especially if
you're delinquent or in default and your loan holder will be able to give you
all the required information.
If the same holder holds all the FFEL loans you want to consolidate, you must obtain the student loan debt consolidation loan from that holder, unless you haven’t been ready to get a loan with income-sensitive repayment terms that are acceptable to you. To be eligible for a William D. Ford direct student loan debt consolidation loan, you must have either a direct Stafford subsidized or unsubsidized loan that will be included in the student loan debt consolidation loan or have at least one Federal Family Education Loan (FFEL) program Stafford subsidized or unsubsidized loan.
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