BEFORE YOU DECIDE BEFORE YOU DECIDE

Here are some factors to consider when

deciding if consolidation is right for you.

The interest rates for each loan— If a Direct

Consolidation Loan offers you a lower rate than your

current loans, you may want to consolidate. The interest

rate is fixed and based on a weighted average, but it

cannot exceed 8.25 percent.

What you can afford to pay each month— If you are

having trouble meeting your monthly payments, have

exhausted your deferment and forbearance options, and

want to avoid default, consolidation may help you ease the

burden.

How much you’re willing to pay over the long term—

Like a home mortgage or a car loan, reducing the amount

of your monthly payments or extending the years of

repayment increases the total amount you have to repay.

How many payments you have left on your loans— If

you are close to paying off your student loans, it may not

be worth the effort to consolidate or further extend your

payments.

What your current lenders offer— Check with lenders

currently holding your loans to see if they can offer terms

and repayment plans that meet your needs better than a

Direct Consolidation Loan can.
Tired of not knowing who holds your loans, how much you owe or

where to call for help? Are you interested in saving time and money?

A Direct Consolidation Loan May Be A Direct Consolidation Loan May Be

The Answer For You! The Answer For You! The Answer For You!

A Direct Consolidation Loan allows you to combine one or more of your

federal education loans into a new loan that offers several advantages.

No Minimum or Maximum Loan Amounts OR Fees

Direct Consolidation Loans do not exclude anyone based on

the size of their loan debt! In addition, consolidation is FREE.

One Lender and One Monthly Payment

With only one lender to deal with and one monthly bill, you

will find it easier than ever to manage your debt. The Department of Education is the lender and this will never change.

Flexible Repayment Options

Direct Consolidation Loans provide four convenient and hasslefree ways to repay your loans, including an income-contingent

repayment plan. These plans are designed to be flexible to

meet the different and changing needs of borrowers. With a

Direct Consolidation Loan, you can switch your repayment

plan at anytime.

Lower Interest Rate

If you consolidate while in school or during your grace period

you may receive a lower interest rate. This saves you money! saves you money!

In-school consolidations are only offered via a Direct Consolidation Loan.

A Second Chance for Borrowers in Default

Direct Consolidation Loans allow you to consolidate your defaulted loans. This will limit further collection costs, reinstate your Title IV eligibility and help you rebuild your credit

rating.

1
 What Is The Interest Rate What Is The Interest Rate

 For Direct Consolidation Loans? For Direct Consolidation Loans?

The interest rate for a Direct Consolidation Loan is fixed. It

is the weighted average of the interest rates on the loans

being consolidated, rounded to the nearest higher one-eighth

of one percent. The rate cannot exceed 8.25 percent. Use

our interactive calculator at www.loanconsolidation.ed.gov to

calculate your weighted average interest rate or call us at

1-800-557-7392.

 Who Is Eligible? Who Is Eligible?

Borrowers Out Of School Borrowers Out Of School

who have at least one Federal Family Education Loan (FFEL)

or Direct Loan.

Borrowers with only FFEL loans must be unable to obtain a

Federal Consolidated Loan from an FFEL lender OR be unable to obtain one with acceptable income-sensitive repayment terms.

Borrowers who apply during their grace period are encouraged to

apply in the third month. Borrowers who apply too early may loose

some of their grace period. Borrowers who apply too late may not

receive the lower interest rate. (We will need to verify your loan(s)

with the current lender(s) before repayment begins.)

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Borrowers In School Borrowers In School

who attend a Direct Loan school at least half time and

include at least one Direct Loan or FFEL Loan that has never

entered repayment.

or

who attend a non-Direct Loan school at least half-time, have

at least one Direct Loan AND include a Direct Loan or FFEL

Loan that has never entered repayment.

In-School Consolidation Savings In-School Consolidation Savings

Loan Term Savings

10 years $779

12 years $968

15 years $1,271

25 years $2,422

This example is based on a borrower with a $20,000 loan debt that has

never entered repayment (two $5,000 loans at 6.32 percent and two $5,000

loans at 7.66 percent). This borrower’s weighted average interest rate is 7

percent. The same borrower would have a weighted average interest rate

of 7.625 percent if he or she consolidated after entering repayment (two

$5,000 loans at 6.92 percent and two $5,000 loans at 8.25 percent).
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Need More Information?

 Call us for: Call us for:

Answers to your questions about Direct

Consolidation Loans

Estimated repayment amounts under each of

our four repayment plans

An application package and help filling out

the forms

Toll-Free Number: 1-800-557-7392

Toll-Free TDD Number: 1-800-557-7395

 Visit our web site to: Visit our web site to:

Use the “interactive calculator” to compare

repayment amounts under the four repayment plans and to calculate your interest

rate

Download Direct Consolidation Loan application materials

Apply on-line for a Direct Consolidation Loan

Internet Address: Internet Address:

http://www.loanconsolidation.ed.gov

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ELIGIBLE LOANS ELIGIBLE LOANS

Federal Stafford Loans

Federal Supplement Loans For Students (SLS)

Guaranteed Student Loans (GSL)

• Health Education Assistance Loans (HEAL)

• Health Professions Student Loans (HPSL)

• Loans for Disadvantaged Students (LDS)

• National Defense Student Loans (NDSL)

• Nursing Student Loans (NSL)

These loans are eligible for consolidation

Loans Ineligible for the

Income Contingent Repayment Plan

Federal Direct PLUS Loans (PLUS)

Federal Direct PLUS Consolidation Loans

U.S. Department of Education • 1-800-557-7392

http:/www.loanconsolidation.ed.gov

Auxillary Loans to Assist Students(ALAS)

Federal Consolidation Loans

Federal Direct Consolidation Loans

Federal Direct PLUS Loans (PLUS)

Federal Direct Stafford Loans

Federal Insured Student Loans (FISL)

• Federal Perkins Loans

Federal PLUS Loans

• Loans ineligible for In-School consolidation