Q: What is a Federal Consolidation Loan?

A: A Federal Consolidation Loan is a loan that repays some or all of your outstanding eligible federal student loans, and replaces the multiple payments you may be making each month with a single student loan payment. In most cases, your repayment term is extended to make your monthly payments more affordable, however, you may always prepay your loan with no penalties. The interest rate on the consolidation will be a fixed rate for the entire term equal to the weighted average interest rates of your consolidated student loans rounded up to the nearest 1/8% not to exceed 8.25%.

Q: Student loan consolidation sounds too good to be true. Is this another debt consolidation scam?

A:Absolutely not! The Federal government created the student loan consolidation program to help students and their parents afford higher education, so that our youth is better educated and can achieve higher earning power. Like many government programs, however, some of the rules and procedures may be a bit complicated.

Q:What if I have already consolidated my student loans. Can I reconsolidate to lock in the lower rate?

A: If you have already consolidated, the Department of Education has ruled that you cannot reconsolidate unless you either received a new eligible loan since the consolidation or have left an eligible loan out of the original consolidation. An existing consolidation loan with no other eligible debt may be able to be refinanced or reconsolidated through our repayment discount program.

Q: How do I get the lowest student loan payments available today?

A: Make your required number of scheduled payments (within the first 15 days of the due date each month) on your new consolidation loan, and we'll automatically reduce your interest rate by one full percentage point and leave it there as long as you continue to make on-time payments. Pay electronically (direct debit payments from your checking or savings account) and you can reduce your interest rate by an additional .25 of a percentage point, as long as you continue to make your payments electronically. When you qualify for both benefits, you can reduce your interest rate by 1.25% and save hundreds, even thousands of dollars on your total loan costs.

Q: Is there a credit check?

A: No credit checks are required to consolidate your loans.

Q: How long will it take for me to repay my loans if I consolidate?

A: Depending on the outstanding balance on your federal student loans (even those you may wish to leave out of the consolidation), you may have up to 30 years to repay your student loans: Important note about your repayment term: You may choose a repayment term that is shorter than the ones noted above.

Q:What are my repayment options?

A: You may choose from the following repayment options: Level Repayment Plan - your least expensive option. Payments are fixed over the life of the loan and repay all principal and interest due each month.

Graduated Repayment - can reduce your payments by more than 50% because you make small, interest-only payments at the beginning of repayment, and larger payments later on, when you may be in a better position to afford them. You may choose from the following graduated repayment plans: