Rules for consolidating student loand
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In the case of a Direct Consolidation Loan made before July 1, 2006, the term “Direct PLUS Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to the loans identified in paragraphs (b)(9) through (b)(12) of this section.
A borrower may not consolidate a Direct Consolidation Loan or a Federal Consolidation Loan into a new consolidation loan under this section unless at least one additional eligible loan is included in the consolidation, except that a borrower may consolidate a Federal Consolidation Loan into a new consolidation loan under this section without including any additional loans if - The borrower has a Federal Consolidation Loan that is in default or has been submitted to the guaranty agency by the lender for default aversion, and the borrower wants to consolidate the Federal Consolidation Loan into the Direct Loan Program for the purpose of obtaining an income-contingent repayment plan or an income-based repayment plan; or The borrower has a Federal Consolidation Loan and the borrower wants to consolidate that loan into the Direct Loan Program for the purpose of using the Public Service Loan Forgiveness Program or the no accrual of interest benefit for active duty service.
For any other defaulted Federal education loan, all collection costs that are owed may be charged to the borrower.
Upon receipt of the proceeds of a Direct Consolidation Loan, the holder of a consolidated loan must promptly apply the proceeds to fully discharge the borrower's obligation on the consolidated loan.
Borrowers may also change repayment plans at least once a year.
Although student and parent borrowers are each eligible to consolidate their loans, they may not consolidate their loans together.
Most servicers make your account information available online 24/7.To obtain a Direct Consolidation Loan, a borrower must submit a completed application to the Secretary.A borrower may add eligible loans to a Direct Consolidation Loan by submitting a request to the Secretary within 180 days after the date on which the Direct Consolidation Loan is originated.All of these could have a financial impact on the total cost of your student loans.Federal consolidation loans allow borrowers to combine several federal student loans into one loan to streamline loan repayment.
First you should consider if you will lose any good rights or benefits when you consolidate your loans.