There are 2 types of consolidation loans:

• Direct Consolidation Loans

• Federal Consolidation Loans

1. Federal Consolidation Loans :

• The Federal Consolidation Loan was designed to assist you with managing your debt. If you have several different loan payments and wish to make just one payment, you may apply for a Federal Consolidation Loan.

• This consolidation program offered by banks and other similar lending institutions.

• Designed for borrowers with at least $10,000 in outstanding loans, a Federal Consolidation Loan combines two or more existing student loans into a new loan with a single, low monthly payment and an extended repayment period.

• Borrowers may apply for a Federal Consolidation Loan during their grace period, once they have entered repayment, or during periods of deferment or forbearance. 

• The types of loans that can be consolidated are:
  Federal Stafford Loans, Federal PLUS Loans, Federal Direct Loans, Federal Supplemental Loan for Students, Federal Perkins Loans, Health Professional Student Loans (HPSL), Nursing School Loans (NSL), Loans for Disadvantaged Students (LDS), Federal Insured Student Loans (FISL), Federal Consolidation Loans.

• The interest rate is the weighted average interest rate of the loans that will be consolidated (rounded up to the nearest 1/8 of 1.00%) and is capped at 8.25%.

• A weighted average is determined by assigning a “weight” based on the proportion of debt you owe at each interest rate.

• There is no fee for consolidation.                                Back

2. Direct Consolidation Loans :

• Direct Loan Consolidation is available from the Federal Government through the Direct Loan Program and is available to borrowers who:
  a) currently have an outstanding balance on a Federal Direct Loan. 
  b) have outstanding FFELP loans but attended an institution that participated in Direct lending.
  c) apply for FFELP consolidation but cannot find an acceptable income based repayment plan for their new FFELP consolidation loan.  

• There are three categories of Direct Consolidation Loans: Direct Subsidized Consolidation Loans, Direct Unsubsidized Consolidation Loans and Direct PLUS Consolidation Loans. If you have loans from more than one category, you still have only one Direct Consolidation Loan and make only one monthly payment

• To be eligible for this loan:
  -Minimum amount outstanding of $10,000 in Federal loans.
  -Students must be graduated/no longer in school before applying.
  -If you have already consolidated, you can't refinance that loan.

• Benefits:
  -Reduce your monthly payment by 50% or More.
  -Apply now and lock in a lower rate for the life of the loan. 
  -Make one loan payment a month. 
  -Improve your credit rating.
  -Match your repayment plan and term to your financial situation. 
  -Reduce your interest rate as much as an additional 1.25% through our benefits package. 
  -Applying for your loan with us is easy.
  -There are no fees, credit checks, application or origination charges associated with your application!

• The loans that can be consolidated under this type are:
  Student loans made under FFEL (subsidized, unsubsidized, SLS, GSL, ALAS, and FISL). (Note: A prior FFEL loan may be included in a Direct Consolidation Loan only if the borrower is unable to obtain an FFEL Consolidation loan with income-sensitive repayment terms that are acceptable, Federal Perkins Loans (including National Defense and National Direct Student Loans), Health related education loans including Health Professions Student Loans (HPSL), Health Education Assistance Loans (HEAL), Nursing Student Loans (NSL),  Loans for Disadvantaged Students (LDS), Subsidized student loans, Unsubsidized student loans, Direct PLUS loans, Prior Direct Consolidation loans, Loans made under the FFEL PLUS program, and Prior FFEL Consolidation loans.           Back