What are the benefits of consolidating my loan?

Consolidating student loans will put all your existing loans into the Federal Loan Forgiveness Program with the Department of Education. You will only have to worry about one payment instead of multiple payments. This makes it easier to manage your debt.

Will my payments be reduced?

In many cases yes, your payment in the new consolidated loan can be lower than your current payment. There are multiple plans to repay your student loan, one of which is the Income Based Repayment Plan. This allows your payment to be based on your annual income, which often times will allow you to qualify for a very small payment and in some cases even a payment amount of zero.

Is there a Minimum or Maximum loan amount that qualify?

No

Can I defer my payments?

Yes, Once you are consolidated you may qualify to renew your deferment options

Will I retain my subsidy benefits?

Borrowers will be able to retain their benefits on subsidized loans when consolidated into the subsidized portion of a consolidation loan.

Am i eligible for a Direct Consolidation Loan?

Borrowers must have at least one Direct Loan of Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default status to qualify. Loans that are in-school status cannot be included in the Federal Loan Forgiveness Program.

If you are in default, you can consolidate under the Income Contingent Repayment Play or Income Based Repayment Plan.

If you are already consolidated but have one loan which is not, you can add that one loan into the consolidation.

Can My PLUS Loan be Consolidated?

Yes, PLUS loans can be consolidated

Can I consolidate my Perkins Loan?

Yes you can consolidate your Perkins Loan into the Direct Consolidation Loan if you include at least one Direct Loan or Federal Family Educational Loan (FFEL). Perkins Loan cannot be included by themselves. There are some disadvantages to consolidating your Perkins Loan so you should consider them prior to consolidating them.

• You will lose your cancellation benefits, such as performing public services.

• Your grace period may be lost.

• Interest Does not accrue when your Perkins Loan is in deferment.

• Perkins Loans generally have lower interest rates but less fliexible repayment periods.

Can I consolidate if I am Currently Enrolled in School?

Yes but with certain conditions. Borrowers cannot consolidate loans that are an in-school status, but borrowers can still consolidate loans that are in grace, repayment or deferment.

What are the repayment plans?

There are several repayment plans in the Federal Loan Forgiveness Program:

• Standard Repayment Plan

You will pay a fixed amount each month until your loans are paid in full. Your monthly payment will be at least $50 for up to 10-30 years, based upon your total education indebtedness (loan amounts).

• Graduated Repayment Plan

Your minimum payment amount will be at least equal to the amount of interest accrued monthly. Your payments start out low, and then increase every two years for up to 10-30 years and is based on your total education indebtedness (loan amounts).

• Extended Repayment Plan

To be eligible, your Direct Loan balance must be greater than $30,000 and you will have up to 25 years to repay your loans. You have two payment options:

– Fixed Monthly Payment Option: You will pay a fixed amount each month until your loans are paid in full.

– Graduated Monthly Payment Options: Your minimum payment amount will be at least $50 or the amount of interest accrued monthly, whichever is
greater. Your payment start off low and then increase every two years.

• Income Contingent Repayment Plan (ICR)

Your monthly payments will be based on annual income, Direct Loan balance, and family size. They are spread over a term of 25 years.

• Income Based Repayment Plan (IBR)

Your monthly payments will be based on your annual income and family size, and spread over 25 years. You must be experiencing a partial financial hardship to initially select this plan and once you select this plan you cannot change to any other plan except standard.