Loan Consolidation for
Students and Parents
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NEW - Special Direct Consolidation Loan Information
Between January 2012 - June 30, 2012 only, the U.S. Department of Education is offering certain borrowers a Special Direct Consolidation Loan opportunity.
- The Federal Loan Servicers WILL CONTACT student loan borrowers WHO QUALIFY, and provide specific application instructions.
- Borrowers should wait for eligibility notification and application instructions.
- After receiving instructions, borrowers who are interested in applying for a Special Direct Consolidation Loan will apply using a new online process. This is different than the regular loan consolidation application and process.
- More information can be found online at www.studentaid.ed.gov/specialconsolidation, or contact the Federal Student Aid Information Center at 1-800-433-3243.
Student Loan Consolidation
Federal Stafford Loan:
Do you know which Federal Stafford loan you have?
Federal Stafford Subsidized – while you are in school (at least part-time) and during your 6 month grace period, you are not being charged interest. You begin paying the principal and interest the day after your grace period ends.
Federal Stafford Unsubsidized – while you are in school beginning the day your loan is disbursed you are being charged interest on your loan. If you do not pay the interest while you are in school or during your six-month grace period, the unpaid interest will be capitalized when repayment begins. Capitalized means interest is added on to the total principal amount of the loan, so you pay interest on unpaid interest.
What does a Federal Consolidation Loan do for me?
- Fixed interest rate: If you consolidate your loans through Direct Loan, you may lock in a low interest rate (based on the weighted average of the interest rates of the loans you consolidate).
- One payment: One convenient monthly payment.
- Extend the repayment period: If your monthly payment is too high and you can’t afford to pay your student loans back in 10 – 15 years, you can consider repayment for up to 30 years, depending on your loan indebtedness. (Remember the longer you take to pay off your loan, the more interest you pay.)
Who is eligible for a Federal consolidation loan?
ONLY graduating seniors may consolidate their Federal Stafford loans during their grace period.
Want to see what your monthly payment would be?
Click on this link http://www.finaid.org/calculators/loanconsolidation.phtml and fill in your total Subsidized Stafford loan amounts plus any Unsubsidized Stafford loan amounts. It will calculate your monthly payment.
How do I apply for a Federal Direct Consolidation loan?
Apply online http://www.dlservicer.ed.gov/consolidatenow/welcome.asp OR call 1-800-557-7392.
Private or Alternative Student Loans:
Do you really know about your private (alternative) loans?
If you have a private or alternative loan, you are being charged interest as soon as the school receives your funds. You should pay whatever interest accrues, so it’s not capitalized. (Capitalized means interest is added on to the total principal amount of the loan, so you are paying interest on unpaid interest.) Most banks and lending institutions send quarterly statements showing the amount of interest accrued during that time period.
Why should I consolidate my private loan?
- To hopefully secure a lower interest rate.
- To lower your monthly payment by repaying over a longer period of time. (Remember the longer you take to pay off your loan, the more interest you pay.)
- To send one monthly payment to one lender, instead of multiple payments to multiple lenders.
What private consolidation loans are available, and how can I apply?
There are two lenders and both have variable interest rate private consolidation loans.
Cedar Lending:
cuStudent Loans, EdSucceed Private Student Loan:
Wells Fargo
- Variable interest rate changes monthly with the Prime. Interest rates vary from Prime + 1% up to Prime + 9.50%.
- For more information, please visit:
https://www.wellsfargo.com/student/repay/private_consolidation/
The information contained here is for informational purposes and is provided to help you make an informed decision. The College does not require you to apply with a recommended lender; it is the borrower’s choice. If you have any questions about this information, please contact the Financial Aid Office between the hours of 8:30-4:30 at 1-717-691-6007.
Parent Loan Consolidation
Federal PLUS (parent) Loan consolidation:
What if my payments are too high on my Federal PLUS (parent) loans?
You may consider changing repayment plans. Here are all the repayment options:
- Standard Repayment: A fixed amount for 10 to 30 years, depending on total loan indebtedness.
- Graduated Repayment: A minimum of at least interest for the first two years, then increases for up to 25 years, depending on total loan indebtedness.
- Extended Repayment: For loans of at least $30,000 or higher, repay up to 25 years. There are fixed payments or graduated payments.
- Income Contingent Repayment: Payments are based on annual income of the borrower, loan balance, and family size. Repay up to 25 years.
- There is no prepayment penalty.
What are the benefits of consolidating Federal PLUS (parent) loans?
If you have Federal PLUS loans from several different lenders and would rather send one payment to one lender, you can consolidate all your Federal PLUS (parent) loans with the U.S. Department of Education.
If your monthly payment on your PLUS loan is too high, you may consider changing to a different repayment plan listed above, or consolidating.
When is my first payment due after I consolidate?
You will receive your bill within 60 days of the first disbursement on your Direct Consolidation Loan.
Where do I send my payments?
You can sign up for an electronic debit account (EDA) and receive a 0.25% interest rate reduction, or you can mail your payments to:
U.S. Department of Education
Direct Loan Payment Center
P.O. Box 530260
Atlanta, GA 30353-0260
Where do I find out more information about PLUS consolidation loans?
For more information on consolidation, please visit www.loanconsolidation.ed.gov. |
