Student federal loan consolidation program
Consolidation is the process of obtaining a loan to combine multiple student loans into one big loan with one monthly payment. Fortunately, one can consolidate defaulted loans as well as loans in repayment status. A student loan is generally considered in default if the payments have not been made within 270 days. Being in default can impact negatively on a students life. Negative consequences can include denial of future loans bad credit scores, seizure of tax refunds, extra fees and interest added to the defaulted loans etc. Consolidating federal student loans is one way to bring them out of default and get on a more affordable payment plan.
Most federal student loans are eligible for consolidation. Loans eligible for federal student loan consolidation program include the Federal Stafford Loan, Federal Direct Loan, Federal Perkins Loan, Health Professions Student Loan, Nursing Student Loan, Federally Insured Student Loan, Auxiliary loan to Assist Students, Federal Supplemental Loan for Students, National Direct Student Loan, Health Education Assistance Loan, Federal Parent Loans for Undergraduate Students, and the Loan for Disadvantaged Students etc.
Federal student loan consolidation program cannot include any non-federal loans. Non-federal student loans acquired from a bank, credit union, or other financial institution cannot be included in federal student loan consolidation. Also ineligible for federal student loan consolidation are loans obtained from friends or family members, loans from the attended college or university and consumer loans from a bank or other type of financial institution.
One type of federal loan, the Federal Primary Care Loan, is not eligible for consolidation. This loan program offers low cost federal student loans to medical students. To obtain a Federal Primary Care Loan, medical students must agree to enter a residency-training program in one of the categories of primary medicine, complete their residency training programs within four years of graduating, and practice in a primary health care field until the loan is completely repaid.
The Federal Perkins loan is eligible for federal student loan consolidation program. However, there are cases in which it would not be advantageous to consolidate a Perkins loan. Perkins Loans offer forgiveness if the candidate choose to work in certain jobs or careers after leaving college. If consolidated, Perkins Loan cannot be forgiven even if the candidate decides to enter one of the specified career fields.
Usually there are no fees involved when applying to consolidate federal student loans. The application is free and, in most cases, no credit check is required. Despite the fact that the application is free, there may be some costs attached to student loan consolidation. These costs are related to guarantee and origination fees. Many federal student loan consolidation websites offer wealth of information on student loan consolidation. Valuable information concerning current interest rates, consolidation loan types, eligibility requirements, and tips for the application process can be found easily through these website.
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