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In-School Consolidation:  I'm Not A Georgetown Student

In-School Consolidation Information

Non-Law Center Students

Spring 2006

Some of our students have mentioned that when speaking to students from other schools, those students were unaware of the benefits of in-school consolidation. Our students wanted to know if we could help. The Law Center Financial Aid Office offers this basic information as a service to students that may not have received this information from their own financial aid office.

PLEASE NOTE: Although we are comfortable recommending that all Law Center students consolidate their loans while in school, we can’t provide counseling services to students who are not attending the Law Center and this information should be critically examined by you prior to acting on the information.

Q: My school has not told me of in-school consolidation. Why not?

A: Good question - we don't know. 

Q: I’m leery of this information. Is this allowed?

A: Yes, the Department of Education clarified its position in a “Dear Colleague Letter” to financial aid professionals on May 16, 2005. An .html version is available on the Department of Education website: www.ifap.ed.gov/dpcletters/GEN0508.html

Q: Why would I want to do this?

A: If you consolidate your loan, you lock in the current interest rate. The consolidation interest rate is based on the current interest rate of 4.7% rounded to 4.75%

Q: Why has Georgetown Law actively promoted in-school consolidation?

A: Last year our students saved over TEN MILLION DOLLARS in interest costs over the life of their loans and we believe that this option can save our students an additional $5,000,000 in interest costs. Why wouldn’t we want our students to know?

Q: I have Ford Federal Direct Loans, does this apply to me?

A: Borrowers of Ford Federal Direct Loans have always been able to consolidate while in school. This change aligns the Stafford and Ford Loan programs. You can visit the Direct Loan consolidation website for more info: www.dl.ed.gov/consolidatenow/welcome.asp

Generic Checklist for Federal Stafford Loans

  • If you have federal loans from a prior school, obtain the loan servicing information from www.nslds.ed.gov. Using your FAFSA pin, you can get the servicing address and phone number so you can include these loans in your consolidation.
  • Select your consolidation lender. If you have more than one Federal Stafford Loan lender (e.g. you borrowed prior to your current school), then you may choose any lender. If all of your Federal Stafford loans are with your current schools lender, then you must consolidate with that lender.
  • Request that your federal loans are placed in repayment by completing the lender’s repayment request form. THIS OPENS THE DOOR FOR YOUR CONSOLIDATION. Send it to your lender(s).
  • Complete your application and submit it to the lender of your choice ASAP. The application should be received by the lender NO LATER THAN May 15, 2006.
  • When your loan is consolidated, you will receive a new disclosure notice. Read it and verify that all of the loans that you included on your application were actually consolidated.

Federal loan consolidation will:

  • Allow you to lock-in the current low interest rate for the life of the loan.
  • Extend the repayment term of the loan based on the amount of your total education debt (up to 30 years).
  • Combine all of your federal loans into one new loan.
  • Not allow you to combine commercial and federal loans.
  • Result in a loss of your grace period – your federal loans will go into repayment immediately following your graduation. A deferment or forbearance that would delay the repayment start date may be requested near graduation.

 

 

Revised Feb. 22, 2006