Consolidating into direct loan program

As you weigh the pros and cons, keep in mind that timing is critical.With just a few exceptions, you get only one chance to consolidate with the government loan programs.Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.

Consolidation was previously available to borrowers while they were still in school. Congress also eliminated joint consolidation for spouses, effective July 1, 2006.Consolidation loan borrowers should not be charged origination fees.If you already have a consolidation loan with either FFEL or Direct, you are not allowed to “reconsolidate’, except in limited circumstances.There are numerous problems that can arise–for example, if one of the divorced ex-spouses wants to apply for IBR.The Department says that borrowers with joint consolidation loans may repay under the IBR/PAYE plan as long as both spouses qualify with partial financial hardships.Both spouses are jointly liable for the loan and both must request IBR.

You must have an account to comment. Please register or login here!