Who is consolidating federal student loans

There are no fees to consolidate. Under no circumstances pay a fee in advance to get a federal education loan or consolidate your federal education loans. There are no fees to consolidate your loans. While other federal education loans, such as the Stafford and PLUS loans, may charge some fees, the fees are always deducted from the disbursement check.

There is never an upfront fee. If someone wants you to pay an upfront fee, chances are that it is an example of an advance fee loan scam. Who Can Consolidate — Both student and parent borrowers can consolidate their education loans. Students and parents cannot combine their loans through consolidation, since only loans from the same borrower can be consolidated.

But they can consolidate their loans separately. Students can consolidate their education loans only during the grace period or after the loans enter repayment. Loans that are in default but with satisfactory repayment arrangements may also be consolidated.

Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you. So, for instance: If the average comes to 6. Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors.

You should consolidate your federal loans if you want to make a single monthly payment or need to consolidate to qualify for programs like Public Service Loan Forgiveness. If you want to save money by lowering your interest rate, consider private loan consolidation — also known as refinancing.

You can consolidate federal student loans with the Department of Education or a private lender, which is also called refinancing. If you refinance federal loans with a private lender, you'll lose access to government programs, like income-driven repayment and Public Service Loan Forgiveness. You can consolidate federal student loans for free with the Department of Education at studentaid.

If you want to consolidate — or refinance — your loans with a private lender, apply directly on the lender's website. Log in to studentloans. Enter which loans you do — and do not — want to consolidate. Choose a repayment plan. You can either get a repayment timeline based on your loan balance or pick one that ties payments to income. Read the terms before submitting the form online.

Continue making student loan payments as usual until your servicer confirms consolidation is complete. If your loans are in default, consolidation is one of a few methods to get your loans back on track. To consolidate defaulted loans you'll need to make three full, on-time consecutive monthly payments on the defaulted loan and agree to enroll in an income-driven repayment plan. You can sign up for free on studentloans.

If you have a large loan balance and a low income, income-driven repayment is probably your best option for the lowest monthly bill. Student loan consolidation is a way to combine multiple federal loans into a single direct consolidation loan.

By applying through the U. Borrowers who have defaulted on one or more federal student loans can use consolidation as an alternative to loan rehabilitation. In general, student loan consolidation is only available for federal loans. Refinancing , on the other hand, is available to borrowers of both federal and private loans.

For borrowers with federal student loans, consolidation can help lower and simplify monthly payments. Student loan consolidation enables borrowers to combine multiple federal student loans into a single federal student loan. Unlike consolidation, refinancing enables borrowers to lower their interest rates, which can save money over the life of the loan. If you consolidate qualifying loans by Oct. Find full details of the action steps you must take on the Federal Student Aid site.

Students who have graduated, left school or dropped below half-time enrollment are eligible to consolidate their federal student loans. There are no credit requirements for federal student loan consolidation. However, there are several other requirements that limit who can apply for a direct consolidation loan:.

In contrast, private student loan refinancing has approval requirements similar to traditional loans. This makes it easy to log in, view your loan details and complete a consolidation application and promissory note, whereby you promise to repay the loan. The application process takes under 30 minutes, and approval can take between 30 and 90 days, so you should continue making payments on your existing loans until the consolidation loan is disbursed. Follow these steps to consolidate your federal student loans:.

Download and print out this worksheet to help you review your options and determine whether consolidation or rehabilitation is right for you. Please visit our blog for the most up to date information on what this will mean for student loan borrowers. Federal Loan Basics Can I get relief? Consolidation to Get Out of Default Consolidation is similar to refinancing a loan. This is because you will lose your rights under the federal loan programs once you choose to consolidate with a private lender.

These include deferment, forbearance, cancellation, and affordable repayment rights. Twitter Facebook LinkedIn. Get updates via email. Can I switch to a more affordable repayment plan? What does my payment cover? How do I get back into repayment if I have defaulted on a federal loan? How is interest calculated? What is a grace period? How can I postpone repayment? What is a deferment? What is forbearance? View all FAQs. Are You Eligible? The Department of Education has announced more borrower defense findings; which applications are getting granted?