Should I consolidate my loans?

Carefully consider whether loan consolidation is the best option for you. Loan consolidation can greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. You might also have access to alternative repayment plans you would not have had before, and you’ll be able to switch your variable interest rate loans to a fixed interest rate.

Once your loans are combined into a Loan Consolidation, they cannot be removed. The loans that were consolidated are paid off and no longer exist.

What are the benefits of consolidating my loan?

Consolidating student loans will put all your existing loans into the Federal Direct Loan 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. Further, within this program there are options that can help make payments more affordable to certain borrowers and may forgive some portion of the loan balance at the end of the loan term.

Will my payment 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.

What types of loans can be consolidated?

Most federal student loans, including the following, are eligible for consolidation:

  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students (SLS)
  • Federal Perkins Loans
  • Federal Nursing Loans
  • Health Education Assistance Loans
  • some existing consolidation loans

If you are in default, you must meet certain requirements before you can consolidate your loans.

A PLUS loan made to the parent of a dependent student cannot be transferred to the student through consolidation. Therefore, a student who is applying for loan consolidation cannot include the PLUS loan the parent took out for the dependent student’s education. Parents can consolidate the loans taken out under their name.

Can I defer my payments?

Possibly. 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.

When can I consolidate my loans?

Generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment.

What is the interest rate on a consolidation loan?

A Loan Consolidation has a fixed interest rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%. However, the rate will not exceed 8.25%.

Are there different repayment plans?

There are several repayment plans that are designed to meet the different needs of individual borrowers. You will receive more detailed information on your repayment options from one of our specialist.  Our specialist will be able to provide you a detailed quote on what repayment options you qualify for.

Public Service Loan Forgiveness Program?

On Oct. 1, 2007, Congress created the Public Service Loan Forgiveness Program to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans after they have made 120 on time payments on those loans under certain repayment plans while employed full time by certain public service employers.  You must not be in default on the loans that are forgiven.

Are these programs legitimate?

Yes, they are! We’re working with new laws passed by Congress to guarantee our clients the best repayment options that fit their needs.

Is there a fee for your services?

It’s a free quote to see what you’re eligible for but we do charge a fee for our services. We’re a professional document preparation company; we do all the work so you don’t lift a finger.

Can I do this on my own?

Yes. You can certainly contact the Department of Education and see what programs you qualify for and apply. We find that many consumers prefer to work with our company since we have expertise work on their behalf to educate them about the programs available to them and streamline the process to get them in the best programs for their situation. Also, we guarantee the lowest repayment options to our clients.

Will a credit check be required to consolidate my loans?

No – the U.S. Government guarantees federal student loans.

What is student loan default?

If you haven’t made a student loan payment in over 180 days, then you are risking going into default. Once in default, your servicer can take different measures in order to collect unpaid student loan payments:

  • Force your employer to garnish up to 25% of your wages
  • Withhold or garnish your tax return funds
  • Refer your case to a collection company who will add collection fees to your balance
  • File a lawsuit against you
If I have already consolidated once before, am I able to do it again?

Yes, but only if…

  • You have since acquired another federal student loan
  • You have multiple consolidations from various lenders
What specific loans qualify for student loan forgiveness?
  • Federal Direct Consolidation Loans (Direct Consolidation Loans)
  • Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)
  • Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans)
  • Federal Direct PLUS Loans (Direct PLUS Loans)—for parents and graduate or professional students.
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 flexible repayment periods.
These loans may be consolidated into a Direct Consolidation Loan?
  • Federal Family Education Loan (FFEL) Program loans, which include
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • Federal PLUS Loans—for parents and graduate or professional students
  • FFEL Consolidation Loans (excluding joint spousal consolidation loans)
  • Federal Perkins Loans
  • Certain Health Professions and Nursing Loans
What is Total and Permanent Disability (TPD) Loan Discharge?
  • Federal Direct Consolidation Loans (Direct Consolidation Loans)
  • Federal Direct Stafford/Ford Loans (Direct Subsidized Loans)
  • Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans)
  • Federal Direct PLUS Loans (Direct PLUS Loans)—for parents and graduate or professional students.
Can I consolidate health professions loans?

Can I consolidate health professions loans?

Yes, you can consolidate certain health professions loans sponsored through the U.S Department of Health and Human Services with other Federal Education Loans. You must still include at least one Direct Loan or Federal Family Education Loan to qualify.

Eligible Health Professions:

  • Health Professions Student Loans (HPSL)
  • Health Education Assistance Loans (HEAL)
  • Loans for Disadvantaged Students (LDS)
  • Nursing Student Loans (NSL)

Benefits of consolidating these loans would include lowering your monthly payment, having a longer repayment period, and having one single monthly payment.

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.

I am already consolidated; can I consolidate again?

Yes, as long as you are including at least one other FFEL or Direct Loan into the new consolidation.

Can I consolidate my loans that are in grace?

Yes, you can consolidate loans that are in grace however you will lose any of your remaining grace period.

Can I delay my application so I don’t lose my grace period?

Yes, you can delay your application to take full advantage of your grace period but you indicate you wish to do this on your application.

How long does It take to consolidate?

It generally will take 60-90 days to consolidate from when the lender has received your application for consolidation.

Can I consolidate my defaulted loan?

Yes, as long as you agree to pay under either the Income Contingent or Income Based Repayment Plan, OR make satisfactory repayments with your current loan holder.

You cannot consolidate a default loan if a judgment has been issues against a defaulted loan which has not been dismissed.

Will consolidating clear the default notation from my credit?

No, if you want to clear the default notation, you will need to contact your loan holder to discuss rehabilitation with them. If you decide to consolidate while in default, your default notation in your credit will also show that the loan was paid off in full. This notation will remain on your credit history for seven years.

What are the repayment plans?

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

  • 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 starts 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.

For more in-depth information on the repayment plans, please see our Repayment Plans page

Can I later on change my repayment plan?

Yes, most borrowers can change their repayment plan at any time once consolidated. Borrowers who are in the ICR plan must make at least 3 consecutive payments into the Direct Consolidation Loan account before changing to another plan. There is no limit to how many times you can change. Borrowers in the IBR plan can only change into the Standard Repayment Plan.