Federal Consolidation Loans
Resources For Borrowers
Federal Stafford and PLUS Loans are government sponsored low-interest loans available to students and parents through a private lender such as a bank, credit union, or savings and loan associations. For loans disbursed prior to 7/1/06, the interest rate is an annual variable rate. For loans disbursed on or after July 1, 2006, the interest rates will be fixed. Interest rates for Federal Stafford Loans will rise to 6.8% effective July 1, 2006. Interest rates for PLUS Loans will increase to 8.5% effective July 1, 2006.
In light of the increase in the interest rates charged as well as some changes in the terms of the loan program, we encourage our new graduates, alumni, and parent loan borrowers to learn more about their options under the Federal Consolidation Loan Program.
HIghlights of the changes that became effective for the 2006-2007 academic year include:
- Elimination of the "early repayment" consolidation option for Stafford Loans;
- Consolidation is permitted only when loans are in a grace or repayment status (including deferments and forbearance)
- This does not affect Federal Perkins Loans
- Elimination of spousal consolidation
- Elimination of the "single holder" rule
- Mandates parallel terms between the FFELP and Direct Loan Consolidation Loan Programs (except as explicitly noted)
Due to issues in the current credit market, several major lenders have chosen to withdraw from offering Federal Consolidation Loans effective in the 2008 spring semester. Students interested in consolidating their loans MAY need to consider consolidating their loans through the Federal Direct Loan Program
A useful brochure is Choosing A Student Loan Consolidator.If you have any problems opening these files, contact our office and we will mail a copy to you.
- Making Sense of Loan Consolidation- This 22 minute webcast is one of many programs offered through Mapping Your Future . They have also posted updated information on their website
Lender Information:
We would encourage all borrowers to review the Department of Educations's Consolidation Checklist before making a final decision about loan consolidation.
Students can choose to use any lender . By law, staff members in the Office of Scholarships and Financial Aid can not make this important personal decision for any student.Families who are new to the loan consolidation may want to review the following information
- FinAid:The Smart Student Guide to Financial Aid has detailed information about consolidation options
- The Greentree Gazette has compiled The Student Loan Buying Guide , a comprehensive database with information on financing options through many major lenders.
- The Project on Student Debt' s Comparing Discounts on Federal Student Loans
- How to Choose a Lender
- " Choosing a Lender " from the U.S. Department of Education's Student Aid on the Web
- S tudent Lending: Some Facts to Consider - This is a brochure published by New York Attorney General Andrew Cuomo
- Choosing A Lender from FinAid:The Smart Student Guide to Financial Aid
- Look Before You Leap: Student Loan Shopping Techniques from The Project on Student Debt
Other Resources
- National Student Loan Data System - This is the Department of Education's database
- National Student Loan Clearinghouse - Select the "Loan Locator" Option
- Mapping Your Future - Select "Financial Fitness Tools"
