Federal Loan Consolidation FAQs – Part 2

Finding Your Federal Loan Lenders

Prior and current federal loans, including prior consolidation loans, by accessing National Student Loan Data Systems (NSLDS) may be found at http://nslds.ed.gov. The website has information on loan amounts, outstanding loan balances, loan statuses and disbursements. To access your records on the NSLDS web site you need to provide your social security number, the first two digits of your last name, your date of birth and your FAFSA PIN number.

Federal Loan Consolidation Repayment Options

·         Standard Plan - allows you to make equal payments over the term of the loan. Every payment includes both principal and interest. This loan has the highest initial monthly payment, but results in the lowest total interest paid over the life of the loan.

·         Graduated Plan - allows your payments to start out low and increase over time. It allows for interest-only payments for the first quarter or third of the total repayment period, followed by increased payments for the term of the loan left.

·         Income-Sensitive Plan - bases loan payments on a percentage of your gross monthly income and the amount borrowed. Repayment term varies based on the percentage you request, your income, and the total loan amount.

·         Extended Plan - you can repay your Federal Consolidation Loan over a 30-year period, on a fixed or graduated payment plan, if you have federal loans totaling in excess of $60,000.

When Does Repayment Begin?

Immediately your loan is been funded, you receive a Federal Loan Consolidation Disclosure Statement and Repayment Schedule from the provider of your new Consolidation loan. Thirty days from the date your loan is funded, you have to begin repayment according to that schedule.

 

Can I Switch Repayment Plans?

Yes. Simply contact your provider to switch plans. No extra costs or penalties are required to switch plans. You can do so once a year.

Maximum Repayment Terms

Current federal regulations stipulate that the maximum length of the repayment term is calculated based on the sum of the loans being consolidated, and the unpaid balance on other student loans. Consolidation offers extended repayment periods from ten to thirty years, depending on your cumulative debt. Your consolidation lender will calculate the actual repayment term.

 

Once I Have Taken Out A Federal Consolidation Loan, Can I Add Any New Loans To It?

Yes. Eligible loans may be added to your Federal Consolidation loan within 6 months of the date that the consolidation loan was funded. To add a loan, contact the provider.

The Office of Financial Assistance suggests that you carefully review the federal loan consolidation program, and make a decision based on your individual need.