There are two (2) possible components of a consolidation loan: Subsidized and Unsubsidized. Borrowers retain their subsidy benefits on loans that are consolidated into the subsidized portion of a consolidation loan.

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

You must have at least one Direct Loan or FFEL Program loan that is in a grace period or in repayment. If you want to consolidate a defaulted loan, you must make satisfactory repayment arrangements on the loan with your current loan servicer before you consolidate, or you must agree to repay your new Direct Consolidation Loan under the Income-Contingent Repayment Plan or the Income-Based Repayment Plan.

A Direct Consolidation Loan 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%.

Repayment of a Direct Consolidation Loan can begin 60 days after the loan is disbursed, or sooner. The repayment term ranges from 10 to 30 years, depending on the amount of your consolidation loan, your other education loan debt, and the repayment plan you select.

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 your loan servicer when you consolidate your loan.

In 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 payments on those loans under certain repayment plans while employed full time by certain public service employers. Call today to speak to a Specialist to see if you possibly qualify.