FAQ

What is a Consolidation?

A :

Consolidation Loans combine several student loans into one bigger loan from a single lender which is then used to pay off the balances on the other loans. It is very similar to refinancing a mortgage. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans.

What are flexible Consolidation Repayment Options?

A :

Borrowers can choose from multiple repayment plans with various term selections to repay their consolidation loan(s), including an Income Contingent Repayment and an Income-Based Repayment Plan. These plans are designed to be flexible to meet the different and changing needs of borrowers. With a student consolidation loan, borrowers can switch repayment plans at anytime. If you select the IBR Plan and want to change at a later date, your only option will be the Standard Plan.

What is the Minimum or Maximum for Student Loan Amounts?

A :

There is no minimum amount required to qualify for a Direct Consolidation Loan or Student Loan Consolidation program.

What are the consequences of defaulting?

A :

Your Federal student loans are considered in default after 270 days (9 months) of non-payment. Consequences include:

Immediate increase in the interest rate of your student loans to 18.5% in addition to any collection agency fees.
Immediate loss of your Title IV Financial Aid benefits.
Negative reporting to the three credit bureaus that could result in difficulties obtaining home and auto loans and credit cards.
Withholding of your federal income tax return by the IRS to repay the defaulted student loans.
Administrative Wage Garnishment of up to 25% of your paycheck.

How long does it take to get out of default?

A :

On average it only takes 4-8 weeks to remove your loans out of a default status.

Can I discharge my Federal student loans in a bankruptcy?

A :

It is extremely difficult to discharge federal student loans in a bankruptcy unlike credit cards or any other type of private lender debt.