Financial Aid
Federal Loan Consolidation Information
Important Information Regarding Federal Loan Consolidation
Should you consolidate your student loans? Maybe. There are several
things to consider. Congress has changed the terms so that a loan
consolidation will not be possible while in school, effective July 1,
2006. Loans issued for the 2006-2007 academic year will have a fixed
interest rate, but any loans issued prior to that stay variable unless
you consolidate.
Your actual consolidation interest rate will depend on the age (date)
of your loans. You can further reduce these interest rates by .25% by
paying by Electronic Debit Account. You should check with your loan
servicer for the current interest rate on your loan(s). It is a weighted
average of your existing loans.
Students who borrowed since July 1995 through SUNYIT, borrowed under
the Direct Loan program and are eligible to consolidate under the
William D. Ford Federal Direct Loan Consolidation Program. Information
can be obtained by calling (800) 557-7392, or at their web page, http://loanconsolidation.ed.gov.
This web page contains various information about loan consolidation,
including a repayment calculator. If you use the web page to
consolidate, with your PIN number, you will even be able to sign the new
promissory note online.
Information needed for completing the Loan Consolidation application:
Direct Loan Lender: US Dept of Education
P.O. Box 5609
Greenville, TX 75403-5609
800-848-0979
Loan Type: D - Federal Direct Stafford/Ford Loan Loan
Type L - Federal Direct Unsubsidized Stafford/Ford Loan
Loan Holder: Borrower
Account Number: Social Security Number - 1
There are many private companies offering consolidation of Federal
Loans. Some of these companies are doing mass mailings, encouraging you
to consolidate by an upcoming deadline (after July 1, you will not be
able to consolidate while in school). They may offer repayment
incentives, if you make a certain number of payments on time. If you are
still a student, you MAY NOT want to use a private company at this
time. If you do, you will lose your grace period. Some private companies
allow you to also consolidate alternative loans, including GATE loans
and other non-federal loans, but at variable interest rates, not fixed.
They may also have guarantee fees. Keep in mind that by using Direct
Loan Consolidation while you are still a student, you will keep your
grace period benefit.
If you are already in repayment and you consolidate, keep in mind
that a consolidated loan will be set up with a new, 10 year repayment
(or longer) and if your goal is to pay less total interest, you may want
to consolidate to lock into a fixed interest rate, but continue making
the same monthly payments you would have been making to pay off the loan
sooner, thus reducing the total interest paid on your loan.
If you are currently a student, and will be continuing your education
beyond this spring, you probably should wait to consider consolidation
until March, by which time your second disbursement should be recorded
at the loan servicer. All students who borrowed from Direct Lending and
will be continuing as a student for Fall 2006, should ONLY consolidate
with the Direct Loan Consolidation program, so that the grace period is
not lost. Do not consolidate Perkins Loans. Changes in the consolidation
program take place on July 1, 2006, so before you consolidate a second
time, you will need to investigate the interest rate calculations to
determine if another consolidation is beneficial.
Once you consolidate a loan, you cannot consolidate again unless you
have additional loans. Review your options, do some research, and make
the best decision for you!
If you consolidate a Federal Direct Loan with another other than
Direct Lending, you will lose the 1.5% up front rebate that you were
given originally on this loan.
Any questions may be directed to the William D. Ford Federal Direct
Loan Consolidation Program at (800) 557-7392 or visit them on the web at
http://loanconsolidation.ed.gov.
