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Student Loan Consolidation Frequently Asked Questions


1. What are the benefits of a Direct Consolidation Loan?

Direct Consolidation Loans allow borrowers to combine one or more of their Federal student loans into a new loan that offers several advantages. Here are some of the advantages:

– One Lender and One Monthly Payment
– Flexible Repayment Options
– No Minimum or Maximum Loan Amounts or Fees
– Reduced Monthly Payments
– Retention of Subsidy Benefits

 2. Who is eligible for a Direct Consolidation Loan?

To qualify for Direct Consolidation Loans, borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in grace or repayment status. Repayment status includes loans that are in a deferment or forbearance period. Loans that are in an in-school status cannot be included in a Direct Consolidation Loan.

3. Can I obtain a Direct Consolidation Loan if I don’t have any Direct Loans?

Yes, borrowers without any Direct Loans may be eligible for a Direct Consolidation Loan if they consolidate at least one FFEL Loan.

 4. Can I consolidate a PLUS Loan?

Yes, PLUS Loans can be consolidated into a Direct Consolidation Loan. However, a parent PLUS is not eligible for the IBR Plan.

5. Can I consolidate a Perkins Loan?

Yes, it is possible to consolidate Perkins Loans into a Direct Consolidation Loan if you have at least one loan that is not Perkins.

 6. Can I consolidate my loans if I am enrolled in school?

Borrowers who are enrolled in school cannot consolidate loans that are in an in-school status.

7. Can I consolidate an existing consolidation loan?

Yes, in some cases. However, you must have at least one loan that is not part of the consolidation.

8. Can I consolidate my loans that are in grace?

Yes. However, once grace status loans are consolidated borrowers lose any remaining grace period.

For more federal student loan frequently asked questions  visit http://loanconsolidation.ed.gov/help/faq.html