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Home Financial Aid Life After GULC Loan Consolidation.
-$3,243 using Access Group's or Student Loan Xpress's direct debit savings and 1% interest rate reduction after 36months of on-time payment.
Exit Session Edition Want to learn more about federal loan consolidation, how it may assist you, and how to apply? You've come to the right place! There's quite a bit of information available about loan consolidation, so this page is somewhat long.
For example : A 2006 graduate who has taken all of his loans after August 1998 consolidates in June 2006, while he is still in his grace period.
The consolidation process is relatively simple and most lenders require that you complete the following basic steps: -Select your Consolidation lender and contact them by telephone or web.
Graduates with commercial loans, however, will find that their combined required monthly federal loan payments will be reduced through consolidation.
However, as the Stafford Loan interest rates through June 30, 2006 are below 5%, including Perkins loans in a consolidation may slightly increase the interest rate on the entire loan.
By consolidating when your loans are accruing interest at the lower interest rate, you could reduce your rate by as much as.
-Lower payments for federal loans could allow the borrower to prepay higher cost commercial loans and credit cards more quickly.
Please note that with a longer repayment period, you will be paying more total interest dollars on the loan.
What if I consolidate my loans and later want to pay my loan off in a shorter period of time?.
Before you consolidate, remember the following timing guidelines: Just Right Start the process NO LATER THAN June 15, 2006 to ensure that your completed signed application is received by the consolidation lender by June 30, 2006.
Consolidating your loans while in school will force you into immediate repayment once you leave school (or drop below half-time enrollment), sacrificing the standard six month grace period, however, graduating students are allowed to request a forbearance to prevent immediate repayment.
For comparison purposes, we assume that borrowers fix their interest rate with consolidation and repay their loans in the original 10 year repayment plan.
-The opportunity to lock-in a low interest rate for the life of the loan.
-You will sign and return a completed promissory note to your consolidation lender.
If you have at least $7500 in federal loans, you are eligible to consolidate your loans once you are no longer enrolled as a half-time student.
What should I do with my Perkins loans or other federal loans? Note: You do not have to consolidate all of your eligible loans.
If you have a question about mail or a telephone call that you received, contact the financial aid office for clarification.
You may receive mail or telephone solicitations, however, from other organizations that want to consolidate your loans.
Please contact the Office of Financial Aid if you have concerns regarding the inclusion of your Perkins loan(s) in your consolidation application.
Current interest rates are at an all-time low for federal Stafford Loans.
Below you will find a brief description of the offerings of our major consolidation choices.
The major drawback is that in the case of divorce, the debt becomes part of the divorce negotiations - the loans cannot be separated once they are consolidated.
Who offers loan consolidation programs? Please note that as of June 15, 2006, the Holder Rule" mentioned below has been abolished.
The consolidation process can take anywhere from 45 to 60 days from the time you submit your application.
The interest rates in effect when you are deciding to consolidate will help to determine if consolidation is a good financial option for you.
What is loan consolidation and which loans can be consolidated?.
Once the consolidation is complete, you are required to begin making payments and this may be slightly prior to the date you had initially planned.
Georgetown University Law Center
-Consolidation allows the loans to be paid over a longer period of time.
The Higher Education Act and its Amendments dictate the interest rate terms of federal loans, which have changed many times over the years.
If you have any questions about your consolidation options, please feel free to call or stop by the Financial Aid Office.
If you have additional questions about loan consolidation, you can contact either your lender or the Financial Aid Office.
If needed, you can request a deferment or forbearance from your consolidation lender to delay repayment.
Additional Federal Loans not commonly held by GULC students: (FISL, HPSL, HEAL, LDS, NSL).
-You will be required to start repayment within 30 days of the completion of the consolidation process.
As a result, if you have borrowed federal loans prior to August 1998, it is likely that the interest rates on those loans will be higher than the rates mentioned above.
A borrower could utilize lower payments in the early years of repayment, then make larger payments when financially able to do so.
Please be advised: Perkins loans carry certain cancellation provisions (primarily addressing law enforcement employment and providing legal services to children), which will no longer be valid if you consolidate them with your Federal Stafford Loans.
For those interested in the updated printable version of Fast Facts About Consolidation , which includes the additional section: Advanced Fast Facts, please click on the link.
Although federal law permits spouses to combine their federal loans into one larger consolidation loan, the Financial Aid Office emphatically recommends against this process.
You can prepay all student loans from lenders on GULC's lender list at any time without penalty, including loans that are federally consolidated.
However, the savings you will reap throughout the life of the loan will make up for any loss of time in your grace period.
How your Consolidation Loan Interest Rate is Determined.
Take your time, but be sure to review all the information before making any consolidation decisions.
There are two ways to consolidate; with the federal Department of Education's Direct Loan Program or with a Federal Stafford Lender, e.
Graduates with Federal Perkins Loans may choose to add these loans to their consolidation, but should wait until this point in order to get the maximum use of the interest free grace period.
Eligible loan types include Federal Stafford (Subsidized and Unsubsidized), Federal Perkins and Federal SLS Loans.
This provides the graduate a greater ability to prepay the more expensive commercial loans.
With the lower mandatory monthly payment that consolidation offers, a borrowers debt to income ratio decreases and makes the mortgage payments appear more manageable.
Too Late If you do not consolidate before June 30, 2006, the interest rate on your loans will increase by over 1.
You can learn more about consolidation through any lenders listed on our loan chart or through the Department of Education by visiting their web sites at: Total Higher Education.
Federal Direct Student Loan (FDSL) Program Loans ( Stafford , PLUS, and Consolidation).
For instance, in the past, graduates have opted to pay off their low-interest Perkins loan separately.
A consolidation loan converts several federal student loan promissory notes into a unified promissory note with new repayment terms.
How do I qualify and when can I apply for consolidation?.
Your loan repayment period can be extended up to 30 years depending upon the total amount of loans you have borrowed, including and federal loans you choose not to consolidate and any commercial loans you have borrowed.
Students borrowing Federal Stafford Loans for the first time after October 7, 1998 may extend their repayment up to 25 years without consolidation, however, without consolidating the loans, the interest rate will remain variable.
Through June 30, 2006, the interest rates on federal subsidized and unsubsidized Stafford loans are 4.
-Depending on the speed of the process, consolidation may start your repayment slightly earlier than would otherwise occur.
Contact your consolidation lender for instructions on how to add these loans.
You will provide the approximate balance and servicing information for your current loans.
the borrower will be required to restart the process and make the necessary consecutive on-time payments (36 months for consolidation loans) after the expiration of the deferment or forbearance to qualify.
If you have questions, please contact the GULC Financial Aid Office at 202-662-9210 or via email at finaid@law.
The approximate interest savings (versus 20-year historic interest rates) per $10,000 of loan principal would be: -$2,820 without utilizing any special repayment incentives.
The interest rates on your loans are most likely variable and are subject to change each year on July 1st.
If your Federal Stafford Loans are held by more than one lender, you may choose from any of the lenders participating in the Federal Consolidation Loan Program.
A side benefit: Consolidating your loans (even if you plan to pay them over the normal repayment term) may increase your eligibility for a home mortgage.
-If you do not know which lender holds your federal loans, you may access the National Student Loan Database at: www.
If the graduate had waited until December, after he entered repayment, his consolidation loan would have been locked in at a rate of 5.
Prepaying your loans at any time could help save you interest costs even if relatively small payments of an additional $25-$50 per month is made.
Current regulations require that if one lender holds all of your Federal Stafford Loans, you must consolidate with that lender, unless that lender does not participate in the Federal Consolidation Loan Program (Single Holder Rule).
All of the lenders that are listed on the Law Center 's lender chart currently offer consolidation loans.
To help in this decision making process, the Financial Aid Office publishes guidelines for consolidation at the end of each academic year.
If you have federal student loans with more than one lender, you can use any consolidation lender, otherwise, you must use your current lender (Single Holder rule).
-Significantly lower required monthly payment for the loans.
Loans eligible for consolidation include: Federal Family Education Loan (FFELP) Program Loans ( Stafford , PLUS, SLS, and Consolidation).
Although consolidation at the favorable rates currently in existence will save borrowers money, there are some costs.
By consolidating your loans, you can lock in an interest rate throughout the life of the loan.
How many years do I have to repay a consolidated loan?.
Loans commonly held by GULC grads NOT eligible for consolidation include: Commercial loans such as: Law Access, T.
If you have any questions regarding a specific consolidation lender, please contact the Financial Aid Office.
Borrowers consolidate for several reasons, including bringing loans from multiple lenders together, lowering required monthly payments, and lengthening the repayment term.
Should my spouse and I consolidate our loans together?.
Is there a specific timeline I should follow for consolidation? May 16.
If the rules change and this advice needs to be updated, we will email all currently enrolled Stafford loan borrowers.
Students who wish to participate in any of the federal loan consolidation plans should explore the consolidation options available to them and complete the consolidation application by June 30, 2006, and contact the various agencies during the six-month grace period following your graduation.
Federal Stafford Loan borrowers, however, may also choose to have their loans consolidated through the U.
Unless it is your current or prior lender contacting you, the Financial Aid Office does not condone these practices nor recommend these consolidators.
In addition, the Financial Aid Office has a greater ability to assist you if you encounter difficulty when using the lender that you used while attending GULC.
Georgetown Law - Loan Consolidation (Financial Aid)
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