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CONSIDERING LOAN CONSOLIDATION?
Cal
Poly offers a variety of student loans to its students. Some of
these loans are federal, and some are not. When entering repayment,
student loan borrowers with more than one loan type are expected
to manage each loan as a separate repayment obligation. This may include making separate payments to separate lenders.
To
consolidate is to borrow a new federal loan to be used
to pay off existing federal loans. Please be advised that only
federal student loans can be included in a federal loan consolidation.
Institutional (campus-based) loans lent through Cal Poly, and/or
alternative loans lent through a Stafford loan lender, cannot, for
any reason, be included.
In
recent years the federal government has added loan rehabilitation
as a repayment option. Among other things, loan rehabilitation
was designed to assist currently, and previously, delinquent student
loan borrowers fix their personal credit rating. Federal
regulations do not permit Cal Poly to extend federal loan consolidation
to include institutional loans (non-federal loans lent to the student
by Cal Poly directly). However, Cal Poly does
offer loan rehabilitation
to
all
its institutional loan borrowers, EXCEPT Robert Noyce Scholarship borrowers.
LOANS OFFERED TO CAL POLY STUDENTS:
- Federal
student loans:
- Federal
Stafford Subsidized/Unsubsidized, and PLUS Graduate loans (a bank is the lender - FFEL)
Update: As of July 1, 2009, Cal Poly utilizes the Department of Education's Direct Lending program. The Direct lending program offers the same loan types as a bank, but the loan lender is now the government.
- Federal Stafford Subsidized/Unsubsidized, and PLUS Graduate loans (the government is the lender - Direct Lending)
As of July 1, 2009, Cal Poly utilizes the Department of Education's Direct Lending program. The Direct lending program offers the same loan types as a bank, but the loan lender is now the government.
- Federal
Perkins (Cal Poly is the lender)
- Non-federal
institutional (campus-based) loans
(Cal Poly is the lender for all
the following loan types):
-
Collins
- Lydia
Humphrey
- Long-Term
Lutz
- Nissen
- Van
Asperen
- CFFA
- Dugan
- Camp
- Noyce Scholarship and Noyce Stipend
- ...And
any other institutional loans lent through Cal Poly
- Non-federal
alternative student loans ( lent by a
bank)
For more detailed information, please use the links below:
Loan
consolidation
Eligible loan types:
- Federal student loans only: eligible federal loan types
Reasons to consolidate:
- To lock in to a fixed interest rate.
- To extend the repayment term - which may lower the expected monthly payment amount.
- The convenience of making only one payment to only one lender.
- To pay off past due loans.
Reasons not to consolidate:
- Federal student loan borrowers may be forfeiting benefits that include teacher cancellation.
- Borrowers who extend their repayment period may pay more in interest over the life of the loan.
- Once consolidated, a borrower's credit report will be updated to reflect a paid in full status for all Stafford and/or Perkins loans included in the consolidation. The consolidation loan will be added to the credit report as a new debt. Borrowers with a history of repayment delinquency who wish to have all previously reported delinquencies permanently removed from their credit report should consider loan rehabilitation, instead of consolidation (see below).
Loan
Rehabilitation
Eligible loan types:
- Federal and non-federal student loans (borrowers need
to check with the lender of each loan they wish to rehabilitate
to determine eligibility). Note: alternative loans lent through a bank may not be eligible. Check with the lender.
Reasons to rehabilitate:
- To help regain eligibility to Title IV financial aid
funds.
- To help repair a personal credit rating (upon successfully rehabilitating
a student loan, the negative repayment history is permanently removed
from the borrower's credit report).
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