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Consolidation
Application Process
IMPORTANT:
Stafford loan borrowers are required, per
federal regulation, to first approach their current Stafford loan
lender to obtain a federal consolidation loan. If the Stafford lender
does not offer a consolidation loan program, or the consolidation
loan program offered does not include an income sensitive repayment
plan that the borrower considers reasonable, the borrower may consolidate
with another entity. If, however, the Stafford loan borrower in
question was also disbursed a Federal Direct student loan (not offered
by Cal Poly), the borrower is free to seek a consolidation through
the Department of Education's William
D. Ford Direct Consolidation loan program instead of the Stafford
loan lender. Note: no matter the consolidation lender, the basic
terms are federally regulated...which ensures that each lender participating
in the federal consolidation program offers the same, or similar,
terms (there are minor term differences between private and federal
lenders).
Please
obtain, complete, and submit a consolidation loan application with
your consolidation loan lender...or access the application via the
lender's web page. The application process, from submission to funding,
will take approximately 45 to 60 days. This is because all the information
you provide on your application must be verified...especially loan
payoff information.
Each
current lender you include on your application will receive a Lender
Verification Certificate to complete and submit to the consolidation
lender. Once the consolidation lender has received all required
verifications, a consolidation loan promissory note is generated
and mailed to you for signature (the process may vary between consolidation
lenders and manual vs. automated systems).
Once
you have signed and mailed in your promissory note, wait about ten
working days, then feel free to contact your consolidation lender
for an application update (funding date). You must continue to make
your regularly scheduled payments until your original loans have
been paid off by the consolidation loan.
Adding
a loan to a consolidation after it has been funded:
Additional
(eligible) loans may be added to a consolidation loan any time within
180 days after the loan has been funded. Borrowers requesting to
add loans beyond the 180 day deadline must re-consolidate to do
so.
Consolidating
with a spouse:
It
may be easier to manage one combined consolidation payment, but
there are disadvantages to joint consolidation:
When requesting the use of deferment/forbearance,
there may be requirements for both persons to be deemed eligible
before the benefit can be granted.
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Both parties remain equally responsible to repay the loan, even
in a divorce situation (check with the consolidation lender for
details).
The
advantage to leaving loans separate is that each spouse remains
solely responsible for their loan debt, no matter what...
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Eligibility for deferment/forbearance is determined using only
the borrower's information;
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In a divorce situation, loans may remain the responsibility of
the original borrower
(check with
the consolidation lender for details).
Helpful links:
Eligible
consolidation loan types
Lender
list
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