Transcript Presentation Title

STUDENT LOAN REPAYMENT OPTIONS
STUDENT LOAN REPAYMENT OPTIONS
Kimber Decker
Regional Director, Partner Solutions
Nelnet Loan Servicing
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SPLIT LOAN SERVICING
•
FFELP loans owned and serviced by lenders and servicers
•
FFELP loans owned by Department of Education and serviced by
federal servicers
o Nelnet, Great Lakes, FedLoan Servicing, Sallie Mae, non-profit servicers
•
Direct Loans
o
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Nelnet, Great Lakes, FedLoan Servicing, Sallie Mae, ACS, non-profit
servicers
•
Goal is to have one federal loan servicer for all of a borrower’s federally
owned loans
•
Continuous initiative to have one servicer per borrower for all federally
owned loans
•
www.nslds.ed.gov
GRACE PERIOD, DEFERMENTS,
FORBEARANCE, AND FORGIVENESS
PROGRAMS
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GRACE PERIOD
5
•
Stafford loans have a grace period; repayment begins six months after
student graduates, withdraws, or drops below half-time enrollment.
•
PLUS loan repayment begins 60 days after full disbursement.
Borrower may defer repayment while the student for whom the parent
obtained the loan is enrolled at least half time, and for Direct PLUS
Loans first disbursed on or after July 1, 2008, for an additional six
months after the student graduates or drops below half-time enrollment.
•
GradPLUS repayment begins at the time the loan is fully disbursed,
and the first payment is due within 60 days after the final disbursement.
However, you may defer repayment while you are enrolled at least halftime. If your Direct PLUS Loan was first disbursed on or after July 1,
2008, you may also defer repayment for an additional six months after
you cease to be enrolled at least half-time.
•
Direct Loan Servicing Center or lender/servicer will send notification of
your first payment due date during your grace/deferment period, if
applicable.
DEFERMENTS
• A deferment is a period of time when payment on a loan is
temporarily postponed.
• Interest payment
– Federal government pays the interest during deferments for
subsidized loans and for the underlying subsidized loans that
were consolidated.
– Borrower is responsible for the interest for unsubsidized
Stafford loans, GradPLUS loans, and PLUS loans and for
the underlying unsubsidized loans that were consolidated
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TYPES OF DEFERMENTS
• Enrolled at least half-time at an approved postsecondary school
• Study in an approved graduate fellowship program or an approved
rehabilitation training program for the disabled
• Unable to find full-time employment (up to 3 years)
• Economic Hardship (up to 3 years)
• Engages in service listed under discharge/cancellation conditions
(Perkins only)
• Active Military Duty, for loans first disbursed on/after July 1, 2001;
while borrower is on active duty during a war or other military option,
or national emergency (up to 3 years)
• www.studentloans.gov
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FORBEARANCE
• Forbearance is a temporary postponement or reduction of
payments for a period of time
o Personal problems such as poor health or economic
hardship
o Affected by circumstances such as a national emergency,
military mobilization, or natural disaster
o Have exhausted eligibility for an internship deferment
o Are serving in a position that may, after a specified period of
service, qualify for loan forgiveness, partial repayment of
loan, or a national service educational award
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FORBEARANCE
• The borrower is responsible for the interest that accrues during
a forbearance
• Recommendation
o Pay at least the interest, as it accrues during forbearance
o Capitalization of interest—interest is added to the principal
balance of the loan, which increases debt and results in
paying interest on interest
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MANDATORY FORBEARANCE
• Medical or dental internship or residency
• Have student loan payments that are 20% or more of monthly
income
• Have payments being made for borrower by the Department of
Defense
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LOAN DISCHARGE PROGRAMS
• Death
• Total and permanent disability
• Borrower’s school fails to pay a refund as required if borrower
withdraws
• Borrower is unable to complete his/her program of study due to
school closure
• Borrower’s loan was falsely certified as a result of crime or
identity theft
• Borrower’s school falsely certified or fraudulently completed a
loan application in borrower’s name without his/her approval
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TEACHER LOAN FORGIVENESS PROGRAM
• Teacher Loan Forgiveness Program
o All federal loans issued after October 1, 1998
o Borrower teaches as a highly qualified teacher in a qualifying
low-income school for five consecutive, complete academic
years
o The loan for which the borrower is seeking forgiveness was
made before the end of the fifth year of his/her qualifying
teaching service
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Public Service Loan Forgiveness Program
•
Created to encourage individuals to enter and continue to work full-time in public service jobs.
•
May qualify for forgiveness of the remaining balance due on your eligible federal student loans
after you have made 120 payments on loans under certain repayment plans while employed full
time by certain public service employers.
•
Only non-defaulted loans made under the William D. Ford Direct Loan Program are eligible for
loan forgiveness. The Direct Loan Program includes the following types of loans:
o
Federal Direct Stafford Loans (Direct Subsidized Loans)
o
Federal Direct Unsubsidized Stafford Loans (Direct Unsubsidized Loans)
o
Federal Direct PLUS Loans (Direct PLUS Loans)- for parents and graduate or professional students
o
Federal Direct Consolidation Loans (Direct Consolidation Loans)
Note: Only payments made on the Direct Consolidation Loan will count toward the required 120
monthly payments. Payments made prior to consolidation are not eligible.
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Public Service Loan Forgiveness Program
The 120 required payments must be made under one or more of the following Direct Loan Program
repayment plans:
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•
Income Based Repayment (IBR) Plan
•
Income Contingent Repayment Plan
•
Standard Repayment Plan with a 10-year repayment period
•
Any other Direct Loan Program repayment plan, but only payments that are at least equal to the monthly
payment amount that would have been required under the Standard Repayment Plan with a 10-year
repayment period may be counted toward the required 120 payments.
REPAYMENT PLANS
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REPAYMENT PLANS
Offered under both Direct Loans & FFELP (Federal Family
Education Loan Program)
• Standard
• Graduated
• Extended
• Income-based
Specific to loan program
• Income-contingent (Direct Loans)
• Income-sensitive (FFELP)
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REPAYMENT PLANS
For all repayment plans, student can:
• Prepay loans without penalty
• Pay on a shorter schedule
• Change repayment plans once per year
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STANDARD REPAYMENT PLAN
• Lowest total loan cost
• Regular payments of both principal and interest are due
monthly, excluding periods of deferment and forbearance
• Minimum monthly payment is $50
• 10-year repayment term
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GRADUATED REPAYMENT PLAN
• Monthly payments are smaller at the start of the repayment
period and gradually increase every two years
• 10-year repayment term
• Total amount paid in interest will be greater than under the
standard repayment plan
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EXTENDED REPAYMENT PLAN
• Lengthens repayment term up to 25 years
• Available to borrowers with more than $30,000 in federal
student loans (per program)
• Total interest costs may be higher over life of the loan, although
monthly payment amount may be lower
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IBR: WHAT IS INCOME BASED REPAYMENT?
• Payments may be significantly lower under IBR, but would also
take longer than standard 10 years to repay, resulting in paying
more over life of loan
• Must have a “partial financial hardship” (PFH) to qualify for IBR
• Provides interest subsidy on subsidized loans for up to 3 years if
IBR payment is less than accrued interest on those loans*
• Provides forgiveness of remaining balance after 25 years (300
eligible payments)
* IBR Subsidy is for the amount of interest that the scheduled payment amount does not cover. This differs from
interest subsidy for deferments and other periods where all in the interest is covered. All interest would be
covered if payment amount is $0.
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IBR: LOANS ELIGIBLE FOR IBR
Eligible:
Non-eligible:
• FFELP / Direct Stafford
• Parent PLUS
• FFELP / Direct Grad PLUS
• Consolidations w/ Parent
PLUS
• Supplemental Loans (SLS)
• FISL
• FFELP / Direct Consolidation
• Non-FFELP or Non-RDL
• State loans
• Perkins Loans
• Private loans
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IBR: PARTIAL FINANCIAL HARDSHIP (PFH)
Borrower’s annual
loan payment using
the Standard 10year Repayment
Plan
>
15% of (borrower’s
adjusted gross
income – 150% of
poverty line amount)
Based on income and family size
Final rules effective 07/01/2010 allow for the PFH to be determined based
on the greater of either: the amount due at the time the loans entered
repayment or at the time the borrower or spouse requests the IBR plan.
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IBR: SCENARIOS
Examples
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Single borrower
with no dependents
Married borrower
with two children
(and no spousal
income or spousal
student loan debt)
Married borrower
with no other
dependents (spousal
income and loan
debt)
Eligible student loan debt
$40,000
$80,000
$40,000
Interest rate
6.8%
6.8%
6.8%
Adjusted Gross Income
$30,000
$60,000
$25,000
10-year Standard plan
monthly payment
$460
$920
$460
Estimated monthly PFH
payment under IBR plan
$170
$340
$40
Reduction in monthly
payment amount
$290
$580
$420
IBR: SCENARIOS
Examples
Single borrower
with no dependents
Married borrower
with two children
(and no spousal
income or spousal
student loan debt)
Married borrower
with no other
dependents (spousal
income and loan debt)
Eligible student loan debt
$40,000
$80,000
$40,000
Interest rate
6.8%
6.8%
6.8%
Adjusted Gross Income
$15,000
$33,400
$22,500
10-year Standard plan
monthly payment
$460
$920
$460
Estimated monthly PFH
payment under IBR plan
$0
$0
(PFH result was $4)
$10
(PFH result was $8)
Reduction in monthly
payment amount
$460
$920
$450
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IBR: IBR AND MARRIED BORROWERS (FILING
A JOINT TAX RETURN)
• Adjusted Gross Income (AGI) is used to determine qualification
• Prior to 7/1/10, for married borrowers filing a joint tax return, we
considered both spouses AGI, but only the borrower’s debt in
determining Partial Financial Hardship (PFH).
• Under the rules effected on 7/1/10, we use the AGI on the joint tax
return and are able to use both of the borrower’s eligible loan
balances to determine PFH.
• NOTE: This change is allowed even if only one spouse applies for
IBR.
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IBR: CHANGES UNDER STUDENT AID AND
FISCAL RESPONSIBILITY ACT (SAFRA)
• Under SAFRA, new borrower’s payment will not exceed 10% of
the discretionary income (currently 15%)
• Outstanding balance will be discharged after 20 years (currently
at 25 years)
• NOTE: These changes are only applicable to NEW borrowers
that receive their loan on or after 7/1/2014
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IBR: LOAN FORGIVENESS
•
The earliest a borrower may qualify for loan forgiveness under IBR
is 2034 (July, 1, 2009 + 25 years)
•
Servicer Perspective: Specific claim filing instructions have not yet
been determined, but it is assumed the servicer files a discharge
request with the guarantor and payment for remaining balance of
principal & interest is paid. For ED servicers, there will be no claim
filing process
•
Borrower Perspective: If they make it to 2034 with a balance, the
loan is to be forgiven
•
Portion left over after the forgiveness years is taxable income
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IBR: LOAN CAPITALIZATION
•
Interest accrues while a borrower is in a period of Partial
Financial Hardship (PFH). Capitalization occurs if/when PFH
status ends.
•
Capitalization occurs:
o
if they no longer qualify for PFH
o
if they go back to a regular repayment schedule
(Permanent Standard)
o
at end of deferment or forbearance
o
if they were to go to another repayment plan
• Since interest does not capitalize until you end a PFH status,
there is a benefit to staying in a PFH payment as long as
possible.
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INCOME-SENSITIVE REPAYMENT PLAN
• Offered only to borrowers under the FFELP
• Monthly payment varies according to gross monthly income
• Monthly payment covers at least monthly accruing interest
• Must reapply annually
• Total interest costs will be higher over the life of your loan than
with standard repayment
• Maximum repayment period is 10 years
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INCOME-CONTINGENT REPAYMENT PLAN
• Offered only to borrowers under the Direct Loan Program
• Monthly payment based on adjusted gross income, family size,
and total Direct Loan debt
• If payment does not cover interest accrued, unpaid amount is
capitalized annually.
• Maximum repayment period is 25 years, and any balance after
25 years (time spent in deferment or forbearance does not
count) is forgiven.
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REPAYMENT CHART
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REPAYMENT CHART (STD 10 YEAR)
Loan
Monthly Monthly
Monthly
Amount Payment Payment at Payment
at 4%
5%
at 6%
Monthly
Payment
at 7%
Monthly
Payment
at 8%
Monthly
Payment
at 9%
$1,000
$10.12
$10.61
$11.10
$11.61
$12.13
$12.67
$5,000
$50.62
$53.03
$55.51
$58.05
$60.66
$63.34
$10,000
$101.25
$106.07
$111.02
$116.11
$121.33
$126.68
$15,000
$151.87
$159.10
$166.53
$174.16
$181.99
$190.01
$20,000
$202.49
$212.13
$222.04
$232.22
$242.66
$253.35
$25,000
$253.11
$265.16
$277.55
$290.27
$303.32
$316.69
$30,000
$303.74
$318.20
$333.06
$348.33
$363.98
$380.03
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SUPPORT SITES
• www.studentloans.gov
o Overview of loan repayment, deferment, forbearance, and
forgiveness programs
• www.nslds.ed.gov
o Overview of all federal loans, including amounts, interest
rates, lender, servicer, status
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CONSOLIDATION
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Should A Student Consolidate?
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•
Are monthly payments manageable? If students are having trouble meeting monthly
payments, have exhausted deferment and forbearance options, and want to avoid default, a
Direct Consolidation Loan may help.
•
Too many monthly payments? If students are sending payments to more than one lender
every month and want the convenience of a single monthly payment, consolidation is an
option.
•
What are the interest rates? If students have variable interest rates on federal education
loans, they may want to consolidate. The interest rate for a Direct Consolidation Loan is
fixed for the life of the Direct Consolidation Loan. The rate is based on the weighted average
interest rate of the loans being consolidated, rounded to the next nearest higher one-eighth
of one percent and can not exceed 8.25 percent.
•
How much is the student willing to pay over the long term? Like a home mortgage or a
car loan, extending the years of repayment increases the total amount to repay.
•
How many payments are left on the loans? If a student is close to paying off their student
loans, it may not be worth the effort to consolidate or extend payments.
Benefits of Federal Direct Loan Consolidation
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•
One Lender and One Monthly Payment
Borrowers have only one lender, the U.S. Department of Education, and one monthly payment due for all loans
included in a Direct Consolidation Loan.
•
Flexible Repayment Options
Borrowers can choose from multiple repayment plans with various terms to repay their consolidation loan(s),
including an Income Contingent Repayment and an Income-Based Repayment Plan. These plans are designed to
meet the different and changing needs of borrowers. Borrowers can switch repayment plans at anytime. If
borrowers select the IBR Plan and want to change at a later date, their only option will be the Standard Plan.
•
No Minimum or Maximum Loan Amounts or Fees
There is no minimum amount required to qualify for a Direct Consolidation Loan. In addition, consolidation is free.
•
Varied Deferment Options
Borrowers with consolidation loans may qualify for renewed deferment benefits. If borrowers have exhausted the
deferment options on their current federal education loans, a consolidation loan may renew those deferment
options. In addition, borrowers may be eligible for additional deferment options when they obtain their first Direct
Loan if they have an outstanding balance on a FFEL Program loan made before July 1, 1993.
•
Reduced Monthly Payments
A consolidation loan may ease the strain on a borrower's budget by lowering the borrower's overall monthly
payment. The minimum monthly payment on a consolidation loan may be lower than the combined payments
charged on a borrower's federal education loans.
•
Retention of Subsidy Benefits
There are two possible portions to a consolidation loan, subsidized and unsubsidized. Borrowers retain their
subsidy benefits on loans that are consolidated into the subsidized portion of a consolidation loan.
Who Is Eligible?
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•
Borrowers must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in
grace, repayment, deferment or default status. Loans that are in an in-school status cannot be
included in a Direct Consolidation Loan.
•
Borrowers can consolidate most defaulted education loans, if they make satisfactory repayment
arrangements with the current loan holders or agree to repay their new Direct Consolidation Loan
under the Income Contingent Repayment Plan.
•
Borrowers who do not have Direct Loans may be eligible for a Direct Consolidation Loan if they
include at least one FFEL Loan OR intend to apply for loan forgiveness under the Public Service
Loan Forgiveness Program.
•
Borrowers who have only a Direct Consolidation Loan cannot consolidate again unless they
include an additional loan.
•
NOTE: The Direct Loan Servicing Center has information on the Public Service Loan
Forgiveness Program.
Eligible Loans
The following federal education loans are eligible for consolidation into a Direct Consolidation Loan:
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Subsidized Loans
Subsidized Federal Stafford Loans
Direct Subsidized Loans
Subsidized Federal Consolidation Loans
Direct Subsidized Consolidation Loans
Federal Insured Student Loans (FISL)
Guaranteed Student Loans (GSL)
Unsubsidized Loans:
Unsubsidized and Nonsubsidized Federal Stafford Loans
Direct Unsubsidized Loans, including Direct Unsubsidized Loans (TEACH) (converted from TEACH Grants)
Unsubsidized Federal Consolidation Loans
Direct Unsubsidized Consolidation Loans
Federal PLUS Loans (for parents or for graduate and professional students)
Direct PLUS Loans (for parents or for graduate and professional students)
Direct PLUS Consolidation Loans
Federal Perkins Loans
National Direct Student Loans (NDSL)
National Defense Student Loans (NDSL)
Federal Supplemental Loans for Students (SLS)
Parent Loans for Undergraduate Students (PLUS)
Auxiliary Loans to Assist Students (ALAS)
Health Professions Student Loans (HPSL)
Health Education Assistance Loans (HEAL)
Nursing Student Loans (NSL)
Loans for Disadvantaged Students (LDS)
Ineligible Loans
Some loans are always ineligible for consolidation. While these loans may not be included in a Direct
Consolidation Loan, they may be considered in the calculation of the maximum repayment period
under the Graduated or Extended Repayment Plan.
These include but are not limited to the following:
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•
Loans made by a state or private lender and not guaranteed by the federal government
•
Primary Care Loans
•
Law Access Loans
•
Medical Assist Loans
•
PLATO Loans
How Do Students Apply?
•
Online Web Application: Apply online. Visit the Application and Promissory Note Home
Page, https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jspxpress
•
Phone Application: 1.800.557.7392. Apply over the phone if you have all Direct Loans.
•
Download a paper copy of the application and promissory note: including the complete
contents of the application package.
OR
•
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Request an application package be mailed:
o
Phone at 1.800.557.7392, 8AM to 8PM (EST)
(TDD 1.800.557.7395) or 334.206.7400 outside USA
o
E-mail at [email protected]
Common Student FAQs
Can I consolidate a Perkins Loan?
• Yes, it is possible to consolidate Perkins Loans into a Direct Consolidation Loan if borrowers
include at least one Direct Loan or Federal Family Education Loan (FFEL) in their request.
Perkins Loans cannot be included in a Direct Consolidation Loan by themselves. Furthermore,
all Perkins Loans consolidated into the Direct Loan Program will be included in the unsubsidized
portion of the Direct Consolidation Loan.
• Borrowers should carefully weigh the advantages and disadvantages of including a Perkins Loan
in a consolidation loan.
• It is recommend that students consider the following points prior to making a decision:
o Perkins Loans are eligible for additional cancellation benefits, such as performing certain kinds of public
service. This benefit is lost when a Perkins Loan is included in a Direct Consolidation Loan.
o Perkins Loans have a grace period of 6-9 months. When a Perkins loan is consolidated, any remaining
grace period is lost.
o Interest does not accrue when a Perkins Loan is placed in deferment. Since a Perkins Loan is included in
the unsubsidized portion of a Direct Consolidation Loan, borrowers are responsible for interest that
accrues throughout the deferment period.
o Perkins Loans generally have a lower interest rate but have a less flexible repayment period of 10 years.
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Common Student FAQs Continued…
Can I Consolidate a Defaulted Loan?
• Generally, federal education loan(s) in default may be consolidated in a Direct Consolidation
Loan if borrowers:
o Agree to repay the loan(s) under the Income Contingent Repayment Plan.
OR
o Make satisfactory repayment arrangements with the current loan holder(s).
*If, before applying for consolidation, borrowers who want to completely clear the default notation from their credit
records, may want to consider another option: loan rehabilitation. Borrowers should contact their loan holders to
obtain more information about this option.
• Borrowers cannot consolidate defaulted loans under these conditions:
o If a judgment has been issued against a defaulted loan, it cannot be included in the consolidation unless
the judgment order has been vacated (dismissed).
o If they are trying to consolidate defaulted Direct Consolidation Loans.
o If they are trying to consolidate defaulted FFEL Consolidation Loans unless they have made satisfactory
repayment arrangements with their current loan holder OR the borrowers agree to repay under the
Income Contingent Repayment Plan.
o If they are trying to consolidate defaulted Perkins or health professions loans unless they have made
satisfactory repayment arrangements with their current loan holders.
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FAQs Continued…
What is the Income-Based Repayment Plan (IBR)?
• Your monthly payments will be based on annual income and family size, and spread over a
term of up to 25 years. You must be experiencing a partial financial hardship to initially select
this plan. Once you select this plan, you cannot change to any other plan except the Standard
Plan.
• If you consolidate more than one loan type (subsidized, unsubsidized and PLUS) ,you will have
one Direct Consolidation Loan with up to two parts: Direct Subsidized and Direct Unsubsidized
(which includes PLUS) Consolidation Loans. Even with up to two parts of each Direct
Consolidation Loan, you make only one payment each month.
How long does it take to consolidate my loans once I submit my application?
• The consolidation process generally takes 60-90 days. Using our online Web application can
reduce the amount of time it takes to consolidate a borrower's loan.
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Special Direct Consolidation Loans
Special Direct Consolidation Loans to eligible borrowers,
beginning in January 2012. This is a short-term consolidation
opportunity, ending June 30, 2012, for borrowers with
•
at least one student loan held by the Department (a Direct Loan or a
Federal Family Education Loan [FFEL] owned by the Department and
serviced by one of the Department’s servicers); and
•
at least one commercially-held FFEL loan (a FFEL loan that is owned
by a FFEL lender and serviced either by that lender or by a servicer
contracted by that lender).
-
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Special Direct Consolidation Loans
•
Who is eligible for a Special Direct Consolidation Loan?
You must have at least one loan owned by the Department of Education and at least
one commercially-held FFEL loan to qualify for a Special Direct Consolidation Loan.
•
What federal student loans are eligible for the Special Direct Consolidation Loan
program?
While you must have both a Department-owned loan and a commercially-held FFEL
loan to be eligible, ONLY your commercially-held FFEL loans are eligible for
consolidation under this initiative. These include:
FFEL Subsidized and Unsubsidized Stafford Loans;
FFEL PLUS Loans (both those taken out by graduate/professional students and
those taken out by a parent to pay for the costs of an undergraduate student); and
FFEL Consolidation Loans
In order to be eligible for consolidation under this initiative, these loans must be in
grace, repayment, deferment, or forbearance.
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Special Direct Consolidation Loans
The following loans are ineligible for this program:
FFEL loans in default or subject to a bankruptcy proceeding;
Perkins Loans;
Health Education Assistance Loans (HEAL), Health Professions Student Loans (HPSL),
Nursing Student Loans (NSL), Loans for Disadvantaged Students (LDS); and
Private student loans
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What are the benefits of Special Direct
Consolidation Loans?
48
•
Interest rate reduction: You will receive a 0.25% interest rate reduction from the current
interest rate on your commercially-held FFEL loan(s) as of the date of consolidation. The
interest rate will be fixed for the life of the loan and cannot exceed 8.25%.
•
Repayment term will not be changed: The repayment term on your Special Direct
Consolidation Loan (the length of time you have to repay the loan) will remain the same as
your current repayment terms and will not be reset. As a result, you will pay less interest
over the life of the loan than you would with a traditional Direct Consolidation Loan.
•
Credit for Previous Income-Based Repayment (IBR) Payments: If you made any IBR
loan payments on your commercially-held FFEL loans prior to consolidation, those
payments will count toward the required repayment time for cancellation if you remain in
IBR. Under IBR, any remaining loan balance is forgiven after 25 years of repayment.
•
Eligibility for loan forgiveness under the Public Service Loan Forgiveness (PSLF)
Program: Loans are eligible for the PSLF Program if you meet the additional program
requirements. Under this program, you may qualify for forgiveness of the remaining balance
due on your eligible Direct Loans after you have made 120 payments on those loans under
certain repayment plans while employed full time by certain public service employers.
How are Special Direct Consolidation Loans different than
traditional Direct Consolidation Loans?
Traditional Direct Consolidation Loan
Special Direct Consolidation Loan
Repayment Term
The repayment term for the loan starts over,
giving students longer to repay their loan. A longer
repayment term may result in lower monthly
payments but will ultimately increase the amount
the borrower will pay over the life of the loan since
more interest will accrue during a longer
repayment period.
Each loan that is consolidated retains its original
repayment term. As a result, borrowers will pay
less interest over the life of the loan than they
would under the traditional consolidation program.
Interest Rate
A fixed rate based on the weighted average of the A fixed rate (not to exceed 8.25%) after applying
interest rates of those loans being consolidated
the 0.25% interest rate reduction to the FFEL
rounded up to the nearest one-eighth of 1%, not to loans being consolidated.
exceed 8.25%.
Electronic Debit Benefit
Eligible for a 0.25% interest rate reduction if the
Eligible for an additional 0.25% interest rate
loan is repaid through the Department’s automatic reduction if the loan is repaid through the
debit system.
Department’s automatic debit system.
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Special Direct Consolidation Loans
Where can I get more
information about Special
Direct Consolidation Loans?
If you have further questions
about Special Consolidation
Loans, you can call 1-800-4FED-AID (1-800-433-3243) for
more information.
Information presented on Special Loan Consolidation
came from:
http://studentaid.ed.gov/PORTALSWebApp/students/en
glish/specialconsolidation.jsp
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QUESTIONS OR DISCUSSION?
Contact information:
Kimber Decker
Regional Director
Nelnet Loan Servicing
[email protected]
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