Frequently Asked Questions
Here are the answers to the most commonly asked questions about direct education loan consolidation.
What is direct education loan consolidation?
Direct education loan consolidation is a way to combine your many student loans into one, easy monthly payment. Student loan consolidation works by issuing you a new loan, usually with a lower interest rate, with which you pay off your existing student loans. You then make one payment to your direct education loan consolidation service each month.
How do I apply for direct education loan consolidation?
You can apply for direct education loan consolidation by clicking the "next step" button on our website's form. This will take you to our free, online application. The application is very brief and does not require you to know the details of your student loan portfolio. If you apply between 8 AM and 10 PM EST, a direct education loan consolidation representative will contact you via telephone within 15 minutes of receiving your application. The application is completely free and comes with no obligation.
What can direct education loan consolidation do for me?
Direct education loan consolidation can help you in a number of ways. Student loan consolidation can reduce your monthly payment burden, lower your interest rates, and extend the time you have to repay your loans, if you wish. Direct education loan consolidation can also reduce the hassle of carrying multiple student loans by bundling all of your loans into one, convenient monthly payment. Check out our benefits of consolidation page for more details.
Who qualifies for direct education loan consolidation?
To qualify for direct education loan consolidation, you must no longer be enrolled in school more than half time, have loans that are in a grace or repayment period, and never have previously consolidated. For federal direct education loan consolidation, you must have qualifying federal loans. For private direct education loan consolidation, you must pass a credit check or recruit a qualified co-signer.
How do you determine my new interest rate?
For federal direct education loan consolidation, your interest rate will be computed using a weighted average of your existing loans' interest rates. This number will then be rounded up to the nearest eighth of a percent, not to exceed 8.25%. This interest rate is fixed for the life of your consolidation loan. For private direct education loan consolidation, your interest rate will depend on your credit and market conditions. Usually, private consolidation loans come with a fixed initial rate for a certain period, followed by rates that fluctuate with market conditions.
