CONSOLIDATION

The basics of consolidation:

WHAT IS A FEDERAL STUDENT LOAN CONSOLIDATION?

Federal student loan consolidation is when you refinance or combine your existing eligible federal student loans into a single loan. When you apply for a Federal Consolidation Loan, you are taking out a new loan to pay off all or a portion of your original eligible federal student loans. The Federal Consolidation Loan has a fixed interest rate and a repayment term of up to 30 years — depending on the total amount of your student loan debt.

WHICH LOANS ARE ELIGIBLE FOR FEDERAL STUDENT LOAN CONSOLIDATION?

Federal Stafford & Federal Direct Stafford Loans (Subsidized & Unsubsidized) Federal Plus & Federal Direct Plus loans.

Even if a loan is eligible, you may not want to include it in a consolidation package.

EX:  The Perkins loans have a 9 month grace period, and cancellation benefits that would be lost if consolidated.

Federal Nursing Student loans, & Health Professions student loans have benefits that would be lost if consolidated.

WHICH STUDENT LOANS ARE NOT ELIGIBLE FOR CONSOLIDATION?

Private/Alternative loans – variable interest rates-can not be locked into a fixed rate.

WHY SHOULD I CONSOLIDATE MY ELIGIBLE STUDENT LOANS?

• Fixed Interest Rates for the term of repayment!
• One Point of Service-one bill each month
• Longer Term of Repayment-lower monthly payment

WHAT ARE SOME OF THE REASONS WHY I MAY NOT WANT TO CONSOLIDATE?

You may pay more interest over the longer term of repayment.

CAN I CONSOLIDATE AGAIN?

You have at least one eligible federal student loan that was not included in your previous Federal Consolidation Loan. In other words, you need to have at least one eligible loan that you did not to consolidate in the prior Consolidation Loan, or at least one new eligible federal student loan that you borrowed after the earlier consolidation. In these cases, the prior consolidation loan can be included as one of the loans you are consolidating in the new Federal Consolidation Loan.

The way consolidation interest rates are calculated, however, it may not be worth it.

BEWARE: This will affect your fixed rate.

CAN I CONSOLIDATE MY FEDERAL LOANS WITH MY SPOUSE’S FEDERAL LOANS?

• The answer is No!!

WHAT IF I AM STILL IN SCHOOL AND WANT TO CONSOLIDATE?

In-school consolidation is no longer available. In order to consolidate you either need to be enrolled for less than 6 credits,  or no longer enrolled in school.

Repayment begins immediately after disbursement of the loan.

Disclaimer:
This e-mail is to address student borrower concerns; the Office of Student Financial Aid can not and will not take a position on this matter. This decision will be strictly between you and your lender.

LOAN REPAYMENT CALCULATOR:
http://finaid.org/calculators/

REMEMBER: Don’t forget to contact your Servicers, and let them know, where you are. If you have questions regarding your loan repayment, go on-line and check your personal account with your Servicer. They are there to help you.

• To find MOST of your Servicers go to https://www.studentclearinghouse.org/secure_area/loan_locator.asp
• You can link right to your Servicers website.
• Should you need help, please e-mail to aidtalk@umaryland.edu