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Loan
Consolidation Information for Federal Student Loan Borrowers
STOP! To successfully research repayment options (such as loan consolidation) borrowers should prepare themselves by accessing their current loan information first:
FIND OUT WHAT KIND OF LOANS YOU HAVE
Debt Summary
(summarizes the borrower's federal student loan debt)
Contact each lender for the following information:
- A copy of your Promissory Note for each loan (review the loan benefits for each loan)
- Lender address & phone per loan
- Interest rate per loan
- Amount due per loan
- Account number per loan
Ways to contact the lender(s):
-
Federal Perkins loans lent by Cal Poly: www.ecsi.net.
- Federal Perkins loan lent by another school: contact that school.
- Federal Stafford loans: refer to the Debt Summary link for contact information.
- All other federal loan types: refer to the Debt Summary link for contact information.
IMPORTANT: Only federal student loans can be included
in a federal loan consolidation. Cal Poly Institutional loans, Robert Noyce Scholarships/Stipends, and/or alternative loans lent through a bank cannot be included in a federal consolidation loan.
WHAT IS A FEDERAL CONSOLIDATION LOAN?
A
federal consolidation loan is a loan used to pay off existing federal student
loans. It is a way to extend a repayment period for up to 30 years - resulting in lower monthly payments and a fixed interest rate.
Consolidating while in school: Student loan borrowers who consolidate while in school should take note of the following:
- Only fully disbursed federal loans (Stafford, Perkins, Grad PLUS) can be included in the consolidation loan. For a loan to be considered fully disbursed, all expected disbursements for the award year (fall, winter, spring terms - and summer, when applicable) must be disbursed to the student.
- Loans disbursed after consolidating will not be added to the consolidation loan unless the (student) borrower re-consolidates.
Federal student loan borrowers looking into consolidation should consider the following:
- Federal Perkins loans cannot be consolidated unless another federal loan type is included. Ask the Consolidation Loan lender for details.
- Borrowers who extend their repayment period to secure lower monthly payments will pay more in interest over the life of the loan.
- Borrowers attempting to consolidate their Stafford federal loans during a grace period (defined as the period of time between dropping below half-time enrollment and the first payment coming due) should ask the consolidation lender if doing so will ensure a lower consolidation loan interest rate.
Borrowers should ask the consolidation loan lender to summarize which of the federal Stafford and/or federal Perkins loan cancellation benefits will be forfeited upon consolidating. Important: The federal Perkins loan program has a series of cancellation benefits that a borrower should review before consolidating. To do so, contact the Perkins loan billing service, ECSI: www.ecsi.net.
- Borrowers in default (due to non-payment) may consolidate their defaulted loan(s) if he/she signs up for the Income Contingency Repayment Plan (ICR) during the application process. Other requirements may apply.
- Borrowers who are denied a consolidation loan -for any reason- should contact the Cal Poly Repayment Counselor for assistance, as there may still be a way to obtain a consolidation loan, or benefit from another repayment option: JDay@calpoly.edu (please include the last 4 digits of ID# with all correspondence).
FEDERAL CONSOLIDATION LOAN PROGRAM:
William Ford Direct Consolidation Loan program
Lent through the Department of Education
FFELP Consolidation program
Lent through a bank
Program update: Many lenders (banks) no longer offer consolidation loans, as recent program changes make doing so unprofitable. The U.S. Department of Education has - and will - continue to offer consolidation loans to student loan borrowers. Their program is called the William Ford Direct Consolidation Loan Program.
HELPFUL LINKS:
Teacher
cancellation provisions
For federal Perkins and federal Stafford loan programs
Federal student loans that can be consolidated
Loan rehabilitation (credit repair)
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