Consolidating private school loan money
The Department strongly encourages borrowers to apply on-line, but you may also download and print a paper application to submit by regular mail. Prior to July 1, 2006, married borrowers could choose to consolidate federal student loans from both spouses or jointly consolidate the loans of either spouse.
The Department provides the following contact information if you have questions: If necessary, you can also try calling the general Student Loan Support Center at 1-800-557-7394. Both borrowers had to agree to be jointly and severally liable for repayment.
APPLYING FOR DIRECT LOAN CONSOLIDATION The Department generally requires all borrowers to apply for Direct Loan consolidation using the web site. It is very important to review this sheet and check to make sure all of the loans you wanted to consolidate are included in the new consolidation loan.
(Click espanol to find a Spanish version of the on-line application). Be sure to meet the deadline for responding if you think there are problems with the consolidation or if you have decided you do not want to go forward.
Using Studentloans.gov: You will need to sign in using your personal identifiers and PIN. You are required to select from the choices listed by the Department of Education). (“Joint and several liability” means that both borrowers are fully liable for the full amount of the debt). Not surprisingly, this caused a lot of problems for borrowers and Congress eliminated the program as of July 1, 2006.
The electronic application consists of five steps: 1. If may make this choice on-line or if you are sending in a paper application, you should send directly to the servicer you choose. The Department provides some general information about servicer performance in the on-line data center and quarterly performance reports. There are still many borrowers struggling with joint consolidation loans.
Both spouses are jointly liable for the loan and both must request IBR.
Although all of these different loans may be consolidated, you must have at least one outstanding FFEL or Direct Loan to obtain a Direct Consolidation Loan.
There are numerous problems that can arise–for example, if one of the divorced ex-spouses wants to apply for IBR.
The Department says that borrowers with joint consolidation loans may repay under the IBR/PAYE plan as long as both spouses qualify with partial financial hardships.
Direct consolidation loans are now the only type of federal student consolidation loan.
Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.