The Office of Financial Aid is interested in providing students with further resources on loan management, loan consolidation and personal finance. We recognize this is a growing area of concern for current students and alumni and would like to offer the tools below to help guide financial understanding.
We would like to encourage current students to stay on track of their student loans as well as learn how to manage their personal funds while in school. For alumni, we would like to support and encourage responsible loan repayment and contact with either your lender or the Department of Education.
This checklist aims to guide students through the academic year by providing reminders for important dates, as well as encouraging students to check in with their personal finances. This form is available to print from the web and can also be found in our office.
Whether you are a current student looking to keep track of your loans during school or a recent graduate looking to locate your federal loans, the National Student Loan Data System (NSLDS) can be a great resource. This website provides an overview of any Title IV aid received during your time as a student (undergrad and graduate). NSLDS also lists the current servicer for federal loans. The FAFSA PIN number given to electronically sign the FAFSA is the same PIN number used to login to this data system. To request a new PIN number, please visit the Federal Student Aid PIN Website.
Benefits of Federal Loan Consolidation
- Consolidation can help ease your monthly payments once you enter repayment by rolling one or more of your federal loans into one payment with one interest rate.
- If you have more than one loan, you can combine the loans into one, fixed rate loan. There is no minimum number of loans or balances to qualify.
- You can also have more than one consolidated loan. If you consolidated before, you may choose not to include your previously consolidated loan in your new loan consolidation.
- Note: In school loan consolidation is no longer an option; consolidation is only an option after you graduate.
- There is no cost to consolidate.
- Many federal loans, including PLUS loans, can be consolidated. Learn more through the Department of Education.
- Effective for all applications received after June 16, 2006, you may consolidate your loans with the lender of your choice.
- Some lenders offer interest-rate reductions and other benefits on consolidation loans. Be sure to read the fine print. Many lenders require you to submit a form, make a phone call, etc. within a specific time period to receive the promised benefit. Failure to do so will result in the forfeiture of the promised benefit.
Disadvantages of Federal Loan Consolidation
- If you take an extended payment plan, you will pay more interest in the long run. If your loan is large, this could cost you thousands of dollars and have a negative impact on your financial future.
- It's possible that the consolidated student loan interest rate will be higher than the interest rates on your other loans. If this is the case, consolidation is not to your advantage.
- If you consolidate your loans during the six month grace period after graduation, you lose the remainder of the grace period.
- If you have already paid off a large portion of your student loans, consolidation may not be worth the money or effort.
- Borrowers with a Perkins loan forfeit the special benefits that come with this loan, including cancellation benefits, if they consolidate.
Federal Loan Consolidation Interest Rates
The interest rate of a consolidation loan is the weighted average interest rate on all the loans you are consolidating.
Federal legislation changed the interest rate structure on Federal Stafford loans and PLUS loans from a variable interest rate to a fixed interest rate for loans received on or after July 1, 2006. The fixed interest rates for these loans for the 2014-2015 year are listed below.
|Subsidized Stafford Loans for Undergraduate Borrowers||4.66%|
|Unsubsidized Stafford Loans for Undergraduate Borrowers||4.66%|
|Unsubsidized Stafford Loans for Graduate Borrowers||6.21%|
|Direct Graduate PLUS Loans for Graduate Borrowers||7.21%|
|Direct Parent PLUS Loans||7.21%|
Interest rates are reviewed annually. Any interest rate adjustments will be made on July 1 and will effective for any loans disbursed after that date.
The interest rate on any loans received prior to July 1, 2006 will remain variable and will change July 1 each year.
Consolidating Other Federal Loans
If you have Perkins, Health Professions, or Nursing loans, you should determine whether consolidating these loans with your Federal Stafford and/or Graduate PLUS Loans will be to your advantage. Be aware, however, that when you consolidate, you will lose the cancellation provisions of these loans. This could be disadvantageous for certain students, such as those who plan to teach in certain designated schools or plan to serve in the Armed Services, Peace Corps, etc. For Perkins loan cancellation information, click here. For Health Professions loan and Nursing loan cancellation information, see your promissory note.
While the checklist above will guide students through the year, there are further resources available through CashCourse. CashCourse provides many student finance guides, and a multitude of information on various financial topics. Plus, it's user friendly and free to use.