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An Overview of Student Loan Debt Consolidation
A student loan
debt consolidation loan allows you to combine your federal student loans into a
single loan with one monthly payment. The repayments of a student loan debt
consolidation loan can be significantly lower than the payment required under
the standard 10-year repayment option. Under the Federal Family Education Loan
(FFEL) Program, banks, secondary markets, credit unions, and other lenders
provide the student loan debt consolidation loan. Under the William D. Ford
Federal Direct Loan (Direct Loan) Program, the federal government provides the
student loan debt consolidation loan.
Most federal education loans are
eligible for inclusion in a student loan debt consolidation loan, including
subsidized and unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins
Loans, Federal Nursing Loans, and Health Education Assistance Loans. However,
private education loans are not eligible for inclusion in a student loan debt
consolidation loan.
To find out which loans can be included in a student
loan debt consolidation loan contact the Direct Loan Origination Center's
Consolidation Department if you're applying for a direct student loan debt
consolidation loan. Contact a participating FFEL lender if you're applying for a
FFEL student loan debt consolidation loan.
It is worth noting that you
are still eligible for a student loan debt consolidation loan after you
graduate, leave school, or drop below half-time enrollment. You can also get a
student loan debt consolidation loan while you're in school. You must, however,
be attending at least half time and have at least one Direct Loan or FFEL in an
'in-school period' which generally means that you have been continuously
enrolled at least half time since the loan was disbursed. There are a number of
conditions that need to be met for you to qualify for a student loan debt
consolidation loan, especially if you are delinquent or in default and your loan
holder will be able to give you all the necessary information.
If the
same holder holds all the FFEL loans you want to consolidate, you must obtain
the student loan debt consolidation loan from that holder, unless you haven't
been able to get a loan with income-sensitive repayment terms that are
acceptable to you. To be eligible for a William D. Ford direct student loan debt
consolidation loan, you must have either a direct Stafford subsidized or
unsubsidized loan that will be included in the student loan debt consolidation
loan or have at least one Federal Family Education Loan (FFEL) program Stafford
subsidized or unsubsidized loan.
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