05.22.07 | Consolidation Q & A
You have come to the right blog today if you are just trying to have some basic questions answered on federal loan consolidation. Here are some commonly asked questions I receive at the Student Loan Network about loan consolidation. Enjoy!
Can I consolidate jointly with my spouse?
No, Effective July, 1 2006 a married couple may no longer obtain a Federal Consolidation Loan as joint borrowers. Why not you ask? When married students consolidated their loans together, each spouse became responsible for the full amount of the loan, and the loans could not be separated if the couple got divorced. To avoid such problems, Congress decided to repeal this provision as part of the Higher Education Reconciliation Act of 2005.
My lender told me I have to consolidate with them. Is this true?
Students and parents can consolidate their loans with any lender, even if all of their loans are with a one lender. (The single holder rule was repealed on June 15, 2006, as part of the Emergency Supplemental Appropriations Act of 2006.) This allows you to shop around for a lender that offers a lower rate or better discounts.
How much does federal loan consolidation cost?
There is no application or processing fee for consolidation. Also, no credit or income verification is needed.
What if I forgot to consolidate one of eligible student loans?
You can only add a forgotten eligible student loan to your new consolidation loan if you add it within 180 days of the loan consolidation. If you are within the 180-day period, this won’t require a new consolidation loan.
The Student Loan Network: Stafford Federal Student Loans, Parent PLUS Loans, Student Loan Consolidation, Private Student Loans, Education Loans/College Loans
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You bring up a point that many people don’t realize – the forgotten student loan. If more people realized that they do have a grace period where they can add on to a consolidation it would really help alot. 180 days is really plenty of time for a student or parent to ‘remember’ a loan.
June 25th, 2007 | #