You can get a Direct Consolidation Loan during your grace period, once you have entered repayment, or during periods of deferment or forbearance. You must consolidate at least one Direct Loan or FFEL Loan. If you don't have a Direct Loan, but you have a FFEL Loan, you must first contact a FFEL lender who makes FFEL Consolidation Loans to ask about obtaining a FFEL Consolidation Loan. If you are eligible for the Direct Loan Income Contingent Repayment Plan and you are unable to obtain a FFEL Consolidation Loan or one with income-sensitive repayment terms that are acceptable to you, you are eligible to apply for a Direct Consolidation Loan.

If you are still in school, you may apply for a Direct Consolidation Loan for any Direct Loans or FFEL Loans if you are attending at least half time and have at least one Direct Loan or FFEL Program loan in an in-school period. (Generally, your loan is in an in-school period if you have been continuously enrolled at least half time since the loan was disbursed.) In addition, if the school you are attending is not a Direct Loan school, at least one of the loans that you consolidate must be a Direct Loan.

If you're in default on a federal education loan, you may be able to receive a Direct Consolidation Loan. For more information, contact the Loan Origination Center's Consolidation Department at 1-800-557-7392. If you are hearing impaired, you may call the TDD number at 1-800-557-7395.

Most federal student loans and PLUS loans can be consolidated. All the loans discussed in the Guide are eligible for consolidation. The Loan Origination Center's Consolidation Department can give you a complete listing of eligible loans. The toll-free telephone number of the Center's Consolidation Department is 1-800-557-7392. If you are hearing impaired, you may call the TDD number at 1-800-557-7395.

Loans that are consolidated into a Direct Consolidation Loan fall into one of three categories:

• Direct Subsidized Consolidation Loans
• Direct Unsubsidized Consolidation Loans
• Direct PLUS Consolidation Loans

If you have loans from more than one category, you still have only one Direct Consolidation Loan and make only one monthly payment. However, interest rates differ depending on the loan category, as do repayment and deferment options for the borrower.

For Direct Subsidized and Unsubsidized Consolidation Loans, the interest rate is variable but cannot exceed 8.25 percent. For Direct PLUS Consolidation Loans, the interest rate is also variable and may not exceed 9 percent. These interest rates are adjusted each year on July 1.

Generally, all the Direct Loan repayment plans are available to borrowers of Direct Consolidation Loans. However, some restrictions may apply. For example, Direct PLUS Consolidation Loans are not eligible to be repaid under the Income Contingent Repayment Plan.

You'll be given more information about consolidation loans during entrance and exit counseling sessions at your school. You may also contact the Loan Origination Center's Consolidation Department at 1-800-557-7392. If you are hearing impaired, you may call the TDD number, 1-800-557-7395.

- posted by Mark Pane @ 7:11 PM 0 comments