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October 20, 2002 News Story
Consolidate Student Loans
Former college students with federal student loans that are now in repayment, or in the grace period preceding repayment, can apply for a one-time loan consolidation and lock in an all-time low interest rate, announces Sandy Gilbert, Wright State University Lake Campus Student Loan Officer.
The Federal Consolidation loan, one of several loans in the Federal Family Education Loan (FFEL) program, offers eligible borrowers the opportunity to consolidate all or some of their outstanding educational loans into a single new loan, even if present student loans are held by more than one lender and are of different types. Applicants for a federal loan consolidation must be in repayment or in the grace period preceding repayment on the loans chosen for consolidation.
All-time low interest rate.
The interest rate is determined when the loan is originated. The rate will be a fixed rate equal to the weighted-average of the interest rates of the loans being consolidated rounded up to the nearest 1/8th of 1% but not exceeding 8.25%. An exception to this would be any outstanding balance representing a HEAL (Health Education Assistance Loan) loan on which variable rates are adjusted annually on July 1.
Repayment Period determined by amount of loan.
The length of your repayment period is dependent upon your total student loan debt. This amount is the total of those loans you choose for consolidation plus "other education loans" you owe, but will not be included in your consolidation loan. "Other education loans" are those that may have been made by an organization under a public or private student loan program exclusively for the purposes of financing the borrower's post-secondary education. For the purposes of determining the borrower's repayment terms, the sum of the "the education loans" may not exceed the amount of the Federal Consolidation loan and may not include any non-Title IV education loans currently in default.
Maximum repayment periods can run from 10 years for less than a $7,500 loan balance up to 30 years for $60,000 or more. There are some deferment options available, including at least half-time enrollment at an eligible institution of higher education, participation in a fellowship/rehabilitation training program, if conscientiously seeking but unable to find full-time employment, and experiencing economic hardship. Loan recipients may add to their consolidation loan once it's been made if certain conditions are met. In addition, loan recipients may be eligible to consolidate delinquent and/or defaulted loans.
Choice of repayment plans available.
Repayment plans include a level payment plan and three different graduated income sensitive repayment plans. The graduated plans feature varying lengths of interest-only periods followed by varied periods of level monthly payments. When applying, you will be asked to specify the repayment plan that best fits your needs. To help you decide which plan to choose, you may calculate your approximate monthly payment under each plan using the Consolidation Calculator on Great Lakes' Higher Education Guaranty Corporation's web site at www.glhec.org.
How to apply.
If you decide you would like to apply for a Federal Consolidation loan and want to use a federal guarantor agency, you may download your combination application and promissory note from the Great Lakes' web site or by calling Great Lakes’ Loan Processing Department toll-free at 1-800-237-6600 from 8:00-4:30 CST. Ask to speak to a consolidation representative.
Paper applications and an information guide are also available from Sandy Gilbert in the Office of Student Services at Wright State University, Lake Campus, 419-586-0336 or 1-800-237-1477, extension 8336.
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