Loan Consolidation Process

   LOAN CONSOLIDATION APPLICATION PROCESS

For a FFEL Consolidation Loan, you (and your parents, if they want a FFEL PLUS Consolidation Loan) can contact the consolidation department of a participating lender for an application and more information. If the same loan holder holds all the loans you want to consolidate, you must obtain your consolidation loan from that holder, unless you haven’t been able to get a loan with income-sensitive repayment terms acceptable to you.

For a Direct Consolidation Loan, you (and your parents, for a Direct PLUS Consolidation Loan) can contact the Direct Loan Origination Center’s Consolidation Department at the number and Web site address listed on the previous page. To get a Direct Consolidation Loan, you must consolidate at least one Direct Loan or FFEL. (For example, if you had only Federal Perkins Loans, you could not get a Direct Consolidation Loan.) If you don’t have a Direct Loan, but you have a FFEL, you must first contact a FFEL lender to ask about getting a FFEL Consolidation Loan. If you can’t get one, or you can’t get one with income-sensitive repayment terms acceptable to you—and you’re eligible for the Direct Loan Income Contingent Repayment Plan—you can get a Direct Consolidation Loan.

If your parents want to apply for a FFEL PLUS Consolidation Loan, no credit checks are required. If they want to apply for a Direct PLUS Consolidation Loan, they are subject to a check for adverse credit history.

If you’re in default on a federal student loan, you still might be able to consolidate, provided the defaulted loan is not subject to a judgment or wage garnishment.

You’ll be given more information about consolidation loans during entrance and exit counseling sessions. You can also go to our Web site, www.studentaid.ed.gov, click on the Repaying tab, then click on Loan Consolidation.

To consolidate your Federal Loans (FFELP Loans) you must contact the financial institution that granted your loan (your current lender). If you have more than one lender, choose one to apply for loan consolidation.

The consolidation lender will send you the necessary information, application form and instructions (Federal Consolidation Loan Application and Promissory Note) . Once you send the signed form and the required details, approval or rejection will be decided in a period of between 30 and 90 days.

If loan consolidation is approved, the consolidating institution will pay for your debts to the other lenders and they will send you a letter with the resulting amount you owe, the interest that will be charged and the new agreement on the interest rate and the monthly payments. Do not stop paying your current loans until the consolidation loan is running.

In cases of direct loan consolidation, the students (or his or her parents if they have a Plus loan) must address the Consolidation Department in the Direct Loan Origination Centre.

If your want information about Direct Consolidation of Student Loans, you can ask to the Consolidate Department phone 1-800-557-7392 or you can find the necessary information, application form and instructions in their website:

http://www.loanconsolidation.ed.gov/