Benefit of consolidating student loans

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Another common problem is that partial discharge of a joint consolidation loan under any of the discharge programs (other than death discharge) does not eliminate joint liability for the remaining balance.

Further, borrowers with joint FFEL consolidation loans, according to the Department, may not reconsolidate into Direct Loans and therefore are not eligible for public service loan forgiveness. The fixed rate is based on the weighted average of the interest rates on the loans at the time of consolidation, rounded up to the nearest one-eighth of a percentage point.

Loans that are not eligible for consolidation include state or private loans that are not federally guaranteed.

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(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.WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.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.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.

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