The Higher Education Reconciliation Act of 2005 eliminated the provision that allowed a FFEL or Direct Loan borrower who is enrolled in school on at least a half-time basis to request to enter repayment early on his or her Stafford Loans if the lender approves. Repayment is now defined as not beginning until 6 months [...]
Posts from ‘April, 2009’
FFEL Consolidation Loan Weighted Average Interest Rate
Consolidation loans have fixed interest rates that are based on the weighted average of the interest rates on the loans being consolidated. A lender can provide a new consolidation loan borrower with the lowest statutory weighted average interest rate for loans by using the lower of the weighted average of the interest rates on the [...]
Can I obtain a Direct Consolidation Loan if I don’t have any Direct Loans?
Yes, borrowers without any Direct Loans may be eligible for a Direct Consolidation Loan if they include at least one FFEL Loan and have been unable to obtain a Federal Consolidation Loan with a FFEL consolidation lender or have been unable to obtain a Federal Consolidation Loan with income-sensitive repayment terms acceptable to them or [...]
FFEL and Direct Stafford Loan Consolidate Eligibility
All FFEL and Direct Stafford Loan borrowers are eligible to consolidate after they graduate, leave school, or drop below half-time enrollment. PLUS loans are eligible for consolidation once they are fully disbursed. Borrowers who are delinquent or in default must meet certain requirements before they may consolidate their loans. Contact your loan holder for more [...]
FFEL and Direct Consolidation Loans Interest Rate
The interest rate for FFEL and Direct Consolidation Loans is set according to a formula established by federal statute. The fixed rate is based on the weighted average of the interest rates on the loans at the time you consolidate, rounded up to the nearest one-eighth of a percent. The interest rate does not exceed [...]
Obtaining a Consolidation Loan
For a FFEL Consolidation Loan, contact the consolidation department of a participating lender for an application or more information. (Your parents should do the same thing if they want to apply for a FFEL PLUS Consolidation Loan.) For Direct Loans, you (and your parents, for a Direct PLUS Consolidation Loan) can contact the Direct Loan [...]
Income Contingent Repayment(ICR) Plan
A repayment plan that bases your monthly payment on your yearly income, family size, and loan amount. As your income rises or falls, so do your payments. After 25 years, any remaining balance on the loan will be forgiven, but you may have to pay taxes on the amount forgiven. Each year your monthly payment [...]
What are Health Professions Loans?
Loan programs authorized by the Public Health Services Act and administered by the U.S. Department of Health and Human Services (HHS) rather than the U.S. Department of Education. Although health professions loans can be included in consolidation loans, borrowers should be aware of the advantages and disadvantages of consolidating these loan types because of the [...]
What is Student Loan Repayment Grace Period?
After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This period is called the “grace period.” Grace periods extend from 6 to 12 months after borrowers leave school: Most FFEL and Direct Loans have 6- month grace periods. [...]
Delinquent Student Loans
Delinquency status indicates that borrowers’ accounts have become past due on payment. This occurs when borrowers’ loan payments are not received by the due dates. Accounts remain delinquent until borrowers bring their accounts current with payments, deferments, or forbearances. If borrowers’ accounts have become delinquent and the borrowers are unable to make payments, deferments or [...]