Consolidating personal school loans
These include deferment, forbearance, cancellation, and affordable repayment rights.
Problems often arise if the ex-spouses are no longer in contact.This means, for example, that a Perkins Loan on its own cannot be consolidated into a Direct Loan.You may consolidate with Direct Loans during grace periods, once you have entered repayment, or during periods of deferment or forbearance.WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.Using Studentloans.gov: You will need to sign in using your personal identifiers and PIN. You have four different “consolidation servicers”: Fed Loan Servicing (PHEAA), Great Lakes, Nelnet and Sallie Mae (now called Navient). (“Joint and several liability” means that both borrowers are fully liable for the full amount of the debt). Not surprisingly, this caused a lot of problems for borrowers and Congress eliminated the program as of July 1, 2006.
The electronic application consists of five steps: 1. If may make this choice on-line or if you are sending in a paper application, you should send directly to the servicer you choose. The Department provides some general information about servicer performance in the on-line data center and quarterly performance reports. There are still many borrowers struggling with joint consolidation loans.
You can consolidate all, just some, or even just one of your student loans.
Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.
The good news is that the Department explains on its web site that if any loan you want to consolidate is still in the grace period, you can delay entering repayment on your new Direct Consolidation Loan until closer to your grace period end date.
You can indicate this when you apply, and the consolidation servicer will wait to process your application until the appropriate time.
APPLYING FOR DIRECT LOAN CONSOLIDATION All borrowers must now apply for Direct Loan consolidation using the web site. It is very important to review this sheet and check to make sure all of the loans you wanted to consolidate are included in the new consolidation loan.