Like many federal loan borrowers, you may have both FFEL and Direct Loans. Once these loans are consolidated, you will have repayment options, some which lower your monthly payments, from which to choose. Consider the advantages and disadvantages carefully before you act.
Once you consolidate, you are locked into a loan with a fixed interest rate. Therefore, if you consolidate your variable interest rate loans and the interest rates drop the following year, you have "locked" into the higher interest rate for the life of the loan.
Click here if you are looking for information on the Special Direct Consolidation loan .
From January through June 2012, the US Department of Education will offer certain borrowers a Special Direct Consolidation Loan.
Based on the amount of federal student loans you combine, you may be eligible for up to 30 years to repay your student loans.
Direct Consolidation sets a fixed interest rate based on a weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%, capped at 8.25%.
If you have several federal education loans, you may want to consider combining them into one new loan with one monthly payment.
This is called loan consolidation and can help keep you organized and on track with repayment. Department of Education (ED) encourages borrowers with both types of loans to consolidate them into the Direct Loan program.
To lower your monthly payment and simplify loan repayment, consider a Traditional Direct Consolidation Loan.
With an average balance of ,400, student debt is a big part of the average college graduate's life.
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Also, you might lose eligibility for certain cancellation or forgiveness programs, especially if you are including Perkins Loans in the Consolidation.
(In either case, check with your lender.) More Interest Paid With a longer repayment period, you'll pay more interest over the life of the loan.