Consolidation can be done through the Department of Education or a private lending institution. The university does not endorse any particular consolidator; it is the borrower's responsibility to determine which is best for them. By using the online calculator that is available at most consolidator's Web sites, you can determine which one may offer the best interest rate or repayment benefits. The information below is specifically regarding the Department of Education's Direct Consolidation Loan Program.
For information about loan consolidation through the Department of Education, please visit StudentLoans.gov. You can use their interactive loan calculator to find out how much your monthly loan consolidation payments will be. Use the calculator with and without your Federal Perkins Loans to determine if your monthly payment will be reduced and which option would be more cost-effective. Please note that if you consolidate your Federal loans, you will lose any Perkins cancellation benefits (i.e., Teacher, Volunteer, Law Enforcement forgiveness benefits) that may apply to certain occupations. Similarly, if you consolidate your Health Professions loan, you will lose deferment options specific to that loan fund. Perkins and Health Professions loans will need to be consolidated into a Federal Direct Consolidation Loan if you want to make them eligible for the Federal Public Service Loan Forgiveness program or any of the federal repayment plans. Private or outside agency loans are not eligible for consolidation with the Direct Consolidation Loan program.
Once a loan consolidation application has been received, the lender will verify the outstanding balances from loans that the student has requested to be consolidated. They will then send out information regarding the successful completion of the consolidation, the interest rate, amount owed, etc.
Once you have successfully consolidated your educational loans you have a 180-day window to include additional loans in your consolidation package.
Completing a request to consolidate loans does not commit you to going through with the consolidation. You will be required to sign a final consolidation promissory note. It is important that you review your loan consolidation paperwork carefully to be sure all of your loans are included. The consolidation process isn't final until you complete, sign and returns this paperwork.