Consolidating subsidized and unsubsidized loans
These include deferment, forbearance, cancellation, and affordable repayment rights.Also, federal consolidation loans generally have lower interest rates.There are numerous problems that can arise–for example, if one of the divorced ex-spouses wants to apply for IBR.The Department says that borrowers with joint consolidation loans may repay under the IBR/PAYE plan as long as both spouses qualify with partial financial hardships.
Although all of these different loans may be consolidated, you must have at least one outstanding FFEL or Direct Loan to obtain a Direct Consolidation Loan.
Direct consolidation loans are now the only type of federal student consolidation loan.
Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.
These circumstances are: Borrowers cannot consolidate private student loans with the federal consolidation loan programs.
However, if you have private loans, you may want to think about consolidating these loans into a new private consolidation loan.
The interest rate must not exceed 8.25% for consolidation loans prior to July 2013.