Don't miss out!
In-school federal loan consolidation is here and we estimate that this opportunity can save our students more than $5,000,000 in interest charges! Continuing students must act immediately to ensure that the current low interest rate of 4.75% is locked in for the life of the loan. The consolidation application must be completed by June 30, 2006.
Be sure to read the Important Questions (And Answers!) section.
This website is the primary means of communication regarding in-school federal loan consolidation. If you follow the instructions available by selecting your lender choice above, you should have no difficulty in completing the consolidation process.
Important Questions (And Answers!)
What type of loans may be consolidated?
Only federal student loans – your commercial loans will remain separate.
What about my Federal Perkins Loan?
Generally a student should not consolidate a Federal Perkins Loan while in school. The Perkins Loan is subsidized and no interest accrues while in school and for nine months thereafter. Once consolidated, a Perkins Loan is considered an “unsubsidized loan” and the student is responsible for the interest that accrues while in school. Unless a student is desperate to consolidate with another lender, in which case the Perkins Loan can be used to “open the door”, we do not recommend consolidating Perkins Loan in school. The loss of the interest subsidy should be taken into account when making your decision.
How is the interest rate determined?
The interest rate on your consolidation loan is the weighted average of the interest on the consolidated loans rounded up to the next full 1/8%. If you are consolidating only Law Center loans, the interest rate is 4.7% and the rounded final rate is 4.75%. Any other loans that you consolidate may have a different interest rate and may change your final consolidation interest rate.
Can I include prior loans (including consolidation loans)?
Yes, but first you should determine the effect of bringing in a loan with possibly higher interest rate. Federal Stafford Loans that have not been consolidated are at a variable interest rate and should always be included so you can lock the rate. Prior consolidation loans generally have fixed interest rates and my not help in the long run. The Law Center Financial Aid Office generally recommends against including a prior consolidation loan unless you are attempting to change lenders. If there is a significant difference in the interest rate and since the rate won’t change on your fixed rate consolidation loan, it is likely better to wait until you graduate and possibly consolidate that loan with your upcoming loans. To help you decide, utilize the NorthStar (T.H.E.) consolidation calculator.
I plan to borrow for the summer – what about those federal loans?
Summer 2006 loans may not be included since the loan will not be fully disbursed until the Fall semester.
Does this change my aid application for the upcoming year?
No, your loans for the upcoming year will not be affected.
When does repayment start?
In exchange for the low fixed interest rate, you will give up your six-month grace period on your consolidated loans. Repayment will start upon graduation or when you drop below half-time status. Don’t worry - graduating students may request a deferment or forbearance to avoid starting repayment and the procedures will be discussed in your Financial Aid exit session. A deferment or forbearance request does not harm your credit.
Can I consolidate in-school and participate in LRAP?
There is no impact to LRAP eligibility through the consolidation of your Law Center federal Stafford Loans. Just ensure that when you graduate and your loans ultimately go into repayment that the consolidation loan(s) are at the 15-year repayment term that LRAP utilizes to obtain maximum LRAP benefits.
Can I re-consolidate this loan when I graduate?
The new regulations will not allow this to occur, but this may change. The Financial Aid Office schedules exit sessions for graduating students that provide the pros and cons of consolidation as applicable to that graduating class.
I have more than one lender, how do I choose my consolidation lender?
The Financial Aid Office strongly recommends consolidating with one of the Law Center recommended lenders so we can assist you if a problem develops. See our information page for more details: www.law.georgetown.edu/finaid/inschool/other
What Type of Federal Loan Borrower Are You?
