Consolidating student loans federal government
When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans."The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you're consolidating," says Ken O'Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market.Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.Request to Add a Loan to an Existing Federal Direct Consolidation Loan Mail your completed form to: Navient - Department of Education Loan Servicing Attn: Loan Consolidations Originations P. Box 6180 Indianapolis, IN 46206-6180 The interest rate is calculated by the weighted average of the interest rates of the loans consolidated, rounded up to the nearest 0.125 percent.So, the interest rate on a consolidation loan may be higher than the underlying loans.With just a few exceptions, you get only one chance to consolidate with the government loan programs.WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.
Learn more about Direct Consolidation Loans on the Federal Student Aid site Apply now at Student Private student loans are NOT eligible for consolidation into a Direct Consolidation Loan.Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans.Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.Although all of these different loans may be consolidated, you must have at least one outstanding FFEL or Direct Loan to obtain a Direct Consolidation Loan.(s) you have or who owns your loan(s), you can get that information from My Federal Student Aid.