Borrowers can combine multiple (at least two or more) federal loans into a single Direct Consolidation Loan (this is the
only federal consolidation loan available).
This is not true, technically speaking the interest rate
on federal consolidation loans is based on a weighted average of the previous interest rates.
At any rate, the only opportunities to combine student loans are offered through the ineffective
Federal Consolidation Loan program and banks that refinance student loans.
There are other factors to consider (the side benefits of
federal consolidation loans for example), and there are additional strategies not covered in this scenario that some borrowers may be able to utilize.
Since July 1, 2010, all
new federal consolidation loans have been made through the direct loan program, so there is no longer any competition among lenders to attract borrowers.
You may qualify for a Grace Forbearance if you want to align payments for a
qualifying Federal Consolidation Loan or a Federal Grad PLUS Loan with other federal loans that have a six - month grace period or post-enrollment period.
Married borrowers may not consolidate their federal student loans into a
joint federal consolidation loan (years ago such a loan was available, but it was problematic for borrowers and is no longer available).
There are other factors to consider (the side benefits of
federal consolidation loans for example), and there are additional strategies not covered in this scenario that some borrowers may be able to utilize.
If you have federal student loans, consolidate them with
a federal consolidation loan rather than switching to a private lender, as you would lose the various advantages that come with a federal loan.
Borrower B consolidates the private loans and the federal graduate loans with an interest rate of 4.25 % which keeps the weighted average of
the federal consolidation loan down to 3.75 % (the federal consolidation loan is lower in this case since the higher interest rate of graduate loans aren't factored in).
The interest rate on
a federal consolidation loan is a weighted average of the borrower's existing loans, rounded up to the nearest one - eighth of a percent.
Federal consolidation loans can only be used for federal student loans, but private consolidation loans can be used for both federal and private student loans.
Getting
a federal consolidation loan isn't usually considered as «refinancing» since the interest rate of the new loan is equal to the weighted average of the loans being consolidated.
However, private loans can't be included in
a federal consolidation loan.
Because the interest rate is a weighted average and rounded up, borrowers won't ever save money on interest by opting for
a federal consolidation loan unless the loans are pre-2006 and have a variable interest rate.
Borrowers with
a federal consolidation loan still have to decide between different repayment plans and must decide whether to make more than the minimum required payment.
Note: Since
all federal consolidation loans come with a fixed interest rate, this section only applies to those considering private consolidation loans.
The weighted average for
a federal consolidation loan for Borrower A is 4.25 %.
A federal consolidation loan lowers your monthly payment by extending the repayment term.
There are three popular ways to lower your student loan payment: income - driven repayment programs,
federal consolidation loans, and private student loan refinancing.
There is one other extended repayment program to consider with the federal government:
the federal consolidation loan program.
CampusOne Student Loans: Through this funding mechanism, Bank of America serviced a variety of student loans, such as Graduate Student PLUS loans, PLUS loans, Stafford loans, and
Federal Consolidation loans.
Federal consolidation loans are eligible for all of the repayment programs listed above.
If you have a Direct Consolidation Loan or
a Federal Consolidation Loan, you may be eligible for forgiveness of the outstanding portion of the consolidation loan that repaid an eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan.
What are the differences between
a Federal Consolidation Loan and an EDvestinU Consolidation Loan?
A Federal Consolidation Loan provides a borrower the possibility of receiving an extended term on their Federal loan but can not result in a reduced interest rate.
With
a federal consolidation loan, you can extend repayment up to 30 years, but be careful, since this could make you pay more over the life of the loan.
This page provides information about education lenders who offer student loans, including the Federal Stafford Loan, Federal PLUS Loan,
Federal Consolidation Loan, private education loans and private consolidation loans.
If you find yourself unable to pay the minimum payment on your student loans, first check to see if you qualify for a deferment on any Federal Stafford, Federal Grad PLUS, or
Federal Consolidation Loans.
The government offers
a federal consolidation loan program, but it does not come with the same benefits as a standard refinance, meaning a reduced interest rate.
CampusOne Student Loans: Through this funding mechanism, Bank of America serviced a variety of student loans, such as Graduate Student PLUS loans, PLUS loans, Stafford loans, and
Federal Consolidation loans.
These loans, also called Title IV Loans, are the Federal Stafford Loans (Subsidized and Unsubsidized), Federal PLUS Loans and
Federal Consolidation Loans.
There is one other extended repayment program to consider with the federal government:
the federal consolidation loan program.
Only Direct Loans are eligible for discharge for fraud, so graduates with Perkins, unsubsidized Stafford, Parent PLUS, Stafford or
Federal Consolidation loans aren't able to discharge their loans.
The other alternative is
a federal consolidation loan.