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WHAT
IS LOAN CONSOLIDATION?
WHAT ARE THE
ELIGIBILITY REQUIREMENTS FOR AN OSLA CONSOLIDATION LOAN?
HOW LONG DOES IT
TAKE FOR THE CONSOLIDATION TO BE COMPLETED?
WHAT ARE THE
REPAYMENT TERMS FOR A CONSOLIDATION LOAN?
WHAT ARE
THE CONSOLIDATION REPAYMENT OPTIONS?
HOW DOES MY
CURRENT LOAN STATUS EFFECT MY ELIGIBILITY FOR AN OSLA CONSOLIDATION LOAN?
DO CONSOLIDATION
LOANS HAVE A GRACE PERIOD BEFORE REPAYMENT BEGINS?
CAN I STILL APPLY
FOR DEFERMENTS AND FORBEARANCE AFTER CONSOLIDATING?
WHAT LOANS CANNOT BE
INCLUDED IN CONSOLIDATION?
CAN I ADD LOANS TO
A CONSOLIDATION LOAN AFTER IT HAS BEEN COMPLETED?
HOW IS THE
INTEREST RATE FIGURED ON A CONSOLIDATION LOAN?
WHAT ARE THE
BORROWER BENEFITS FOR CONSOLIDATING WITH OSLA?
WHAT IS LOAN
CONSOLIDATION? - Loan consolidation combines multiple education loans
into one new loan with a new repayment term, monthly payments, and interest
rate.
Consolidation
lets you convert all Federal education loans (not private
loans) into a single loan with a fixed interest
rate.
WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR AN OSLA
CONSOLIDATION LOAN? -
All loans to be consolidated must be in either repayment or grace status.
Defaulted or delinquent loans may be considered. If you have loans with more
than one lender, OSLA can consolidate your loans. At least one of your student
loans must currently be with OSLA. The minimum total of your eligible student loans must be:
Prior to July 1, 2008 $5,000
July 1, 2008 or After $30,000
HOW LONG DOES IT TAKE FOR THE CONSOLIDATION TO BE
COMPLETED? - The typical processing time for a consolidation loan is
four to six weeks. You should continue to make payments on your existing loans
unless you are in forbearance, deferment, or your six-month grace period until
the processing for your loan consolidation is completed.
WHAT ARE THE REPAYMENT TERMS FOR A CONSOLIDATION LOAN?
- Repayment terms for a Consolidation Loan Total Debt Years to Repay
Repayment
terms for a Federal Consolidation Loan
|
| Total Debt |
Years to Repay |
| $5,000 - $7,500 |
10 years |
| $7,501 - $9,999.99 |
12 years |
| $10,000 - $19,999.99 |
15 years |
| $20,000 - $39,999.99 |
20 years |
| $40,000 - $59,999.99 |
25 years |
| $60,000 or more
|
30 years |
After June 30, 2008, OSLA will
require a minimum loan balance of $30,000 to qualify for a Consolidation loan.
WHAT
ARE THE CONSOLIDATION REPAYMENT OPTIONS?- You may choose one of several
repayment options for your Consolidation Loan.
Standard Payments in which you will make equal monthly payments. The
final payment may be slightly larger or smaller.
Graduated Payments in which your monthly payments will be smaller in the
beginning of repayment and increase by four percent every 24 months.
Income-sensitive Payments in which the amount of your monthly payments
will be adjusted annually based on your expected total monthly gross income
from employment and any other sources. Payments may increase or decrease. If
you select this option, your initial repayment amount will be based on a
standard or graduated payment plan unless otherwise specified in accompanying
materials. After your Consolidation Loan has been processed, you will be
required to submit additional information to assist the lender in determining
your income-sensitive payment.
Extended Payments which
allows borrowers with FFELP loans in excess of $30,000 to repay over a 25-year
period. Under the other repayment options, you must have at least $40,000 in
debt to qualify for a 25-year repayment period. If you have debt in excess of
$60,000 and wish to repay over 30 years you should select one of the other
repayment options.
Not all FFELP borrowers with loans in excess of $30,000 qualify for Extended
Repayment.The extended repayment schedule is limited to new borrowers on or
after October 7, 1998, with an outstanding balance of principal and interest in
FFELP loans totaling more than $30,000. The lender may schedule the borrower
for standard or graduated installments over a period not to exceed 25 years.
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HOW DOES MY CURRENT LOAN STATUS AFFECT MY ELIGIBILITY
FOR AN OSLA CONSOLIDATION LOAN?
LOANS IN GRACE STATUS: If your
loans are in grace and you choose to waive any portion of the six-month grace
period, leave item #26 of the Consolidation Application Form blank. This will
allow OSLA to consolidate your loans prior to grace ending. If a date is filled
in this area, the application will not be processed until the grace period
ends.
LOANS IN DEFERMENT STATUS: The
consolidation will not be processed during deferment unless a request is made
to end the deferment early.
LOANS IN DEFAULT: If your loans
have defaulted, you must verify eligibility for consolidation with the current
holder of said defaulted loans.
LOANS IN FORBEARANCE STATUS: If
your loans are in forbearance or in the process of applying for any type of
forbearance you will need to indicate if you wish to have your application
processed before or after your forbearance ends.
DO CONSOLIDATION LOANS HAVE A GRACE PERIOD BEFORE REPAYMENT
BEGINS? - No. You are required to begin making monthly payments within
30 days of completing consolidation. If you consolidate during your grace
period, you will lose any remaining portion of it.
CAN I STILL APPLY FOR DEFERMENTS
AND FORBEARANCE AFTER CONSOLIDATING? - Yes. Consolidation loans remain
eligible for forbearance and deferments.
WHAT
TYPES OF LOANS ARE ELIGIBLE FOR CONSOLIDATION?
Federal Family Education Loan Program (FFELP)
Subsidized and Unsubsidized Stafford Loans
PLUS Loans
Grad PLUS Loans
Perkins Loans
Nursing Student Loans
Supplementary Loans for Students
Health Professions Student Loans
Consolidation Loans (if you have new eligible loans that were not previously
consolidated.)
Federal Insured Student Loans (FISL)
Direct Subsidized and Unsubsidized Stafford Loans
Direct PLUS Loans
Direct Consolidation Loans
WHAT LOANS CANNOT BE INCLUDED IN CONSOLIDATION? - You
may not include private loans you received from banks, credit unions, savings
and loan associations, your parents, or other individuals. Loans issued by
colleges are also not eligible. You cannot use consolidation loans to finance
other types of personal debt, including credit card balances or car loans.
CAN I ADD LOANS TO A CONSOLIDATION LOAN AFTER IT HAS BEEN
COMPLETED? - Yes. You can add one or more eligible existing or new
loans to the consolidation within 180 days after the completion of the
consolidation loan. The completion of an addendum form will be required. In
addition, you may reconsolidate an existing consolidation loan with any
eligible loans that were left out of the previous consolidation. If you do not
have any new loans after you consolidate, you are not eligible to reconsolidate
per current Student Loan Guidelines.
HOW IS THE INTEREST RATE FIGURED
ON A CONSOLIDATION LOAN? - The consolidation loan has a fixed interest
rate, based on the weighted average of the interest rates of the loans being
consolidated rounded up to the nearest 1/8th of one percent. The
weighted-average rate calculation is based on the official interest rates for
the loans being consolidated, not including the TOPS interest rate reduction
(not available on new Consolidation loans after June 30, 2008).
WHAT ARE THE BORROWER BENEFITS FOR
CONSOLIDATING WITH OSLA?
Loans consolidated after June 30, 2008 do not qualify for borrower benefits.
Remember
In order to consolidate with the current benefits the completed and signed
consolidation application must be received by mail, overnight mail, fax or
personal delivery by 5 p.m. on June 30, 2008. E-signed consolidation
applications must be received with the time/date stamp of 11:59 p.m. Central
Time on June 30, 2008.
With the lower interest rates and availability of the OSLA incentives for
non-consolidated loans, borrowers with balances under $30,000 may actually
benefit more by not consolidating.
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