Loan Consolidation Q&A

Back to Top

Am I eligible for loan consolidation?

You may apply for a Consolidation Loan during your grace period or once you’ve entered repayment. Stafford and PLUS borrowers may consolidate their loans at any time during repayment including periods of deferment or forbearance.

Back to Top

What will be my interest rate?

The Federal Consolidation loan interest rate is a fixed rate equal to the weighted-average of the interest rates of the loans being consolidated rounded up to the nearest 1/8 of 1% but not exceeding 8.25%.

Back to Top

Are there fees that I must pay to receive a Federal Consolidation loan?

There are no processing or application fees associated with consolidating a loan.

Back to Top

Who should I call for a Consolidation Loan?

Call the lender who funded your Federal Loans. If you have multiple loans with different Federal lenders, you may contact the lender of your choice to discuss your options.

Back to Top

How long do I have to repay my Federal Consolidation loan?

Total Education Costs	Max. Debt Payback Period
$ 7,500 - $ 9,999.99	12 years
$10,000 - $19,999.99	15 years
$20,000 - $39,999.99	20 years
$40,000 - $59,999.99	25 years
$60,000 or more	30 years

Back to Top

What are my repayment options?

Your lender offers a choice of repayment plans including a level payment plan and different graduated income sensitive repayment plans. Contact your lender for specific details regarding the repayment plans offered. You will be asked to specify the repayment plan that best fits your needs on the Federal Consolidation Loan Application and Promissory Note.

Back to Top

Are there deferments available on a Federal Consolidation loan?

A Federal Consolidation loan borrower may defer payment of principal and interest during certain periods. Deferment options available to the borrower depend on two factors: when the borrower’s Federal Consolidation loan was made and whether after the consolidation the borrower still has an outstanding principal or interest balance on a FFELP loan before July 1, 1993. Generally, deferments are authorized for the following situations:

At least half-time enrollment at an eligible institution of higher education	No time limit
Graduate fellowship / rehabilitation training program	No time limit
If you are conscientiously seeking but unable to find full-time employment in the United States	Up to 36 months
Economic hardship	Up to 36 months

If you are not eligible for a deferment, you may be able to temporarily suspend your payments by applying for a forbearance. Contact Great Lakes Educational Loan Services, Inc. (Great Lakes) Borrower Services Department at 1-800-236-4300 for more information on deferment or forbearance.

Please note: If your loan(s) was in a deferment or forbearance at the time of the consolidation, you will need to reapply for the deferment or forbearance for your new consolidation loan. Your consolidation loan will be in repayment effective the day of the disbursement.

Back to Top

May I add to my Federal Consolidation loan once it’s been made?

Yes, you may add any other/new eligible loan(s) to your outstanding consolidation loan, provided you make the request within 180 days of the date the consolidation loan is made. You may also be eligible for a subsequent consolidation loan if you wish to consolidate your existing consolidation loan with at least one other eligible loan.

Back to Top

If I consolidate my loans, can I re-consolidate if the rates should go lower?

No, once a loan is consolidated it cannot be re-consolidated at a lower rate.

Back to Top

If my loans are in repayment and I’ve already earned discounted rates due to borrower benefits, if I consolidate will I lose my lower rates?

Yes, by definition a consolidated loan is a new loan with a new interest rate and current borrower benefits will not apply.

Back to Top

If I choose to consolidate and then change my mind, can it be undone?

No, once a loan is consolidated it remains consolidated because the borrower completed a promissory note.

Back to Top

Do you have to take the entire consolidation repayment term to pay off the loan?

There is no penalty for pre-payment.

Back to Top

What if you default and have a consolidated loan?

Several instances could occur:

Back to Top

What if I receive solicitation from a Consolidating Company?

If you have questions, contact your lender who funded your Federal Loans.

 

<>I have more questions! For more information on the Federal Consolidation loan program, contact Great Lakes Education Loan Services.