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Messiah College Office of Development



Loan Consolidation for

Students and Parents



Messiah College

Student Loan Consolidation


Federal Stafford Loan:


Do you know which Federal Stafford loan you have?


Federal Direct Stafford Subsidized – while you are in school (at least part-time) and during your 6 month grace period for loans disbursed prior to July 1, 2012, you are not being charged interest.  You begin paying the principal and interest the day after your grace period ends. Interest begins accruing upon leaving school for loans disbursed after July 1, 2012.

Federal Direct 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 in repayment 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 to one servicer: 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.)


Are there any negatives for consolidating my Federal loans?

  • If you consolidate your Federal Stafford and Perkins loans together, you will lose any Perkins loan benefits.
  • If you consolidate your Federal loans you will lose your grace period.  As soon as the consolidation loan has been completed, your loan repayment begins within 30 days.  If you began the loan consolidation application as soon as you graduated, you forfeit your grace period.  It is best to wait toward the end of your six-month grace period before beginning the loan consolidation application.  Please keep in mind it may take 4 or more weeks before your loan consolidation is approved.


Who is eligible for a Federal consolidation loan?

ONLY graduating seniors may consolidate Federal loans during their grace period.

Want to see what your monthly payment would be?

Click on this link 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 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.  Again, we recommend paying accrued interest whenever you can.

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 four lenders, with private consolidation loans.

    Cedar Lending:

  • Variable interest rates ranging from Libor + 4.25% - 6.75% (See application page for more details).
  • Up to 15 year repayment term with no-prepayment penalties.
  • Interest-only repayment option for up to 4 years for eligible borrowers.
  • Co-signer release option after 12 months of on-time principal and interest payments.
  • For more information, please visit:


    Citizens Bank Education Refinance Loan



    cuStudent Loans, EdSucceed Private Student Loan:


   SunTrust Private Student Loan Consolidation


   Wells Fargo

  • Variable interest rate changes monthly with the Prime. Interest rates vary from Prime + 1% to Prime + 9.50%.
  • APR examples can be found on the Disclosure Statement here.
  • For more information, please visit:

The information contained here is for informational purposes only and is provided to help you make an informed decision.  The College does not require you to apply with a specific 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 53026
Atlanta, GA  30353-0260


Where do I find out more information about PLUS consolidation loans?


For more information on consolidation, please visit


2013-2014 Application Packet
FAFSA on the Web Worksheet
Complete Your FAFSA
Read FA Booklet
Financial Aid Presentation
Private Loan Marketplace
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