Student Loans
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Frequently Asked Questions 1) Auto Loans: New and Used Vehicles
Loan Program Questions
Student FAQs
1.
What is the Federal Stafford Loan?
Federal Stafford Loans are low interest loans that help students pay the cost of attending a post-secondary school. The Federal Stafford Loan is part of the Federal Family Education Loan Program (FFELP). Stafford loans are insured by
guaranty agencies such as Great Lakes. Great Lakes works with banks, savings and loan associations, and credit unions to make unsecured loans to qualifying students enrolled in institutions of higher education.
2.
Who can borrow a Federal Stafford Loan?
You may be eligible if you meet the following requirements:
3.
How old do I need to be to borrow a Stafford loan?
There is not a minimum age established in federal regulation to be eligible for the Stafford Loan you must have at least a high school diploma, the recognized equivalent of a high school diploma, or meet one of the following standards:
4.
What is the difference between Subsidized and Unsubsidized Stafford Loans?
A subsidized loan is based on financial need as determined by the school. It is interest-free for the borrower if the borrower meets the following criteria:
o
Student is enrolled at least half-time at an eligible institution
o
Student is in a grace period
o
Student is in an authorized period of deferment
A Unsubsidized loan is not based on financial need and is for students who do not qualify for the Subsidized Federal Stafford loan, or need to cover additional education costs. This type of loan accrues interest immediately after disbursement of the
loan proceeds. Your school will determine which of these loans you are eligible for and how much.
5.
How much can I borrow for Federal Stafford Loans?
Your annual loan limit may not exceed the school's cost of attendance minus any other financial assistance you receive. If your enrolled in a program that lasts for less than a full academic year, your loan amount will be prorated
accordingly. The following table shows the annual and aggregate borrowing limits for students with various loan types and academic status.
Current Limits
New Limits
In order to be eligible for new Stafford loan limits, your first disbursement must be made on or after July 1, 2008 and your loan period must end on or after July 1, 2008.
6.
What is the interest rate?
The interest rate on new Subsidized loans is fixed at 6.8%, changing to 6.0% for undergraduate loans first disbursed on or after July 1, 2008. The interest rate on a new Unsubsidized Stafford loan is fixed at 6.8%. The interest on your
subsidized Federal Stafford Loan will be paid by the federal government on your behalf while you are enrolled on at least a half-time basis and during your grace period, making the loan interest-free for those periods. After that, payment of interest and
principal becomes your obligation. The interest on your unsubsidized Federal Stafford Loan will not be paid by the federal government during your in-school and grace periods. The interest rate is the same as in the subsidized Federal Stafford Loan, but accrues
from the time of disbursement. You can either make periodic payments or the interest can be capitalized, at the time of repayment, which means that it will be added to the principal amount of your loan.
7.
Are there any other costs to obtain a Federal Stafford Loan?
Loan Origination Fee - To help lower the program costs, The Department of Education charges each borrower up to three percent of the loan amount. This charge is automatically deducted from the disbursement.
8.
Is the Federal Stafford Loan insured if I die or become disabled?
If you die, or become totally and permanently disabled the Department of Education will repay the loan, along with any outstanding interest, thereby satisfying the borrowers obligation.
9.
Is my loan insured if I am a victim of identity theft?
Loans are eligible for discharge if it is determined that the borrower's eligibility was falsely certified as a result of the crime of identity theft. For purposes of the discharge, a local, state or federal judicial determination must
conclusively determine that the loan was falsely certified due to the crime of identity theft only if the decision identifies the perpetrator of the crime.
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Frequently Asked Questions
Application Questions What is the Federal application process?
First, the student must complete a Free Application for Federal Student Aid (FAFSA). The school and student receive a Student Aid Report (SAR), which summarizes the information the student provided in the FAFSA. The school uses the SAR to
determine the student's eligibility for grants and loans. If it is determined that a Federal Stafford Loan is the best option for you, you can obtain a Master Promissory Note (MPN) from a participating lender, such as a bank, credit union or savings and loan
association. Many schools may have a process in place you will need to follow. Contact your financial aid office for information on all available financial aid. Your educational institution can furnish information about the program you are interested in, as
well as the associated costs and the alternatives available to meet those costs.
The application process is almost identical to the process used when the student attends a school in the U.S. First, the student must complete a Free Application for Federal Student Aid (FAFSA). The school and student receive a Student Aid
Report (SAR), which summarizes the information the student provided in the FAFSA. The school uses the SAR to determine the student's eligibility for grants and loans. There are three items the student must have to apply for a loan:
No, the loan will not default. If the interest on the unsubsidized loan is not paid during the in-school period, it will continue to accrue and be capitalized, or added to the principal balance, when the loan enters repayment. The student will
be notified through the mail periodically about the accruing interest. |
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Frequently Asked Questions
Repayment Questions
Repayment of the Federal Stafford Subsidized and Unsubsidized Loan begins when your grace period expires. This one-time grace period begins when you drop below a half-time enrollment status and lasts for six months. The first payment will be
due after the grace period ends. Be aware that for a Stafford Unsubsidized Loan, interest continues to accrue during the six-month grace period. Any unpaid accrued interest is added to your principal balance when the loan enters repayment.
Yes. The payment received will first be applied to unsubsidized accrued interest, if any, then to the principal balance.
Yes. You can get your loan history from National Student Loan Data System (NSLDS), a student access web site. This web site can be used to make inquiries about Title IV loans, grants,
amounts outstanding, loan status, and disbursements. It is required that you first be issued a personal identification number (PIN), which can be requested through the web site www.pin.ed.gov. The PIN will
be mailed to you within 7-10 days of the request.
Great Lakes offers automatic payment through CheckFree. There are several ways to start using this service:
1. You may download the CheckFree authorization form to complete and mail back. After you log in to this site, choose Electronic Payments > Sign Up For Automatic Payment from the menu on the left.
2. You may call Great Lakes at 1-800-236-4300 for an authorization form to be mailed to you to complete and mail back.
3. The payment coupon book that you receive has a CheckFree authorization form included that you may complete and send in.
You may call Great Lakes at 1-800-236-4300 to increase the amount you want automatically debited per month.
No. This information can be found on your Disclosure/ Repayment statement that is sent to you. You may call Great Lakes at 1-800-236-4300 to get account information.
There are many different options such as graduated repayment, income sensitive repayment, and consolidation. These are ways in which you would be able to lower your monthly payments. Contact your lender or servicer to find out which option
would be best for you.
Effective July 1, 2009, an income-based repayment plan will be available. The Department of Education and the student loan industry are still developing this plan.
Effective July 1, 2008, a borrower may consolidate his or her FFELP loans into the William D. Ford Federal Direct Loan Program (Direct Loan) Program to take advantage of the public service loan forgiveness program. This program provides for
the cancellation of the remaining balance due on eligible Direct Loan Program loans after the borrower has made 120 payments after October 1, 2007 on those Direct Loans.
Each January, you will receive a statement indicating the amount of student loan interest paid from the prior year. |
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Frequently Asked Questions
Deferment Questions
Yes, there are certain authorized periods of deferment, during which you may temporarily stop making payments. Each deferment has specific eligibility requirements. For Subsidized Stafford Loans the federal government pays the interest during
a deferment. Unsubsidized Stafford Loans continue to accrue interest during deferments. Refer to the following chart for deferment eligibility.
If you are having a temporary financial hardship you might want to consider a forbearance. A forbearance is a temporary suspension of payments for a designated period of time. During any forbearance interest accrues and is capitalized at the
end of the forbearance period.
Note: Forbearances are not automatically granted and are allowed solely on the lender's discretion.
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Frequently Asked Questions
Answers to Commonly Asked Questions
1.
What is a Federal Consolidation loan?
A Federal Consolidation loan is one of several loans in the Federal Family Education Loan Program (FFELP). A Consolidation loan offers eligible borrowers the opportunity to consolidate all or some of their outstanding federal
educational loans into a single new loan, even if their present student loans are held by more than one lender and are of different types.
2.
Which loans can I consolidate?
o
Subsidized Stafford Loans - FFELP or Direct
o
Unsubsidized and Nonsubsidized Stafford Loans - FFELP or Direct
o
Federal Supplemental Loans for Students (SLS)
o
Federal Perkins Loans, formerly National Defense/National Direct Student Loans (NDSL)
o
Health Professions Student Loans, including Loans for Disadvantaged Students (HPSL)
o
Health Education Assistance Loans (HEAL)*
o
Federal Insured Student Loans (FISL)
o
PLUS (Parent) Loans (note that you may not consolidate your parent's PLUS loan with your own) - FFELP or Direct
o
PLUS Loans (for graduate/professional students) - FFELP or Direct
o
Subsidized Consolidation Loans - FFELP or Direct
o
Unsubsidized Consolidation Loans - FFELP or Direct
o
Federal Nursing Loans
* Some lenders do not consolidate HEAL loans. Contact your lender for more information.
3.
Can I consolidate my private loans with my Federal student loans?
No, any loan that is not part of a federal student loan program cannot be consolidated with a Federal Consolidation loan. Your private loans, however, may be considered in calculating your maximum repayment period. To do so, list
your private loans in Section D.2. Education Loan Indebtedness - Loans You Do Not Want to Consolidate on page 2 of your Federal Consolidation application.
Your private loan holder may offer consolidation options. Contact your private loan holder for more information.
4.
Can I consolidate my loans with my spouse?
Effective July 1, 2006, married couples are not permitted to borrow a federal consolidation loan as joint borrowers.
5.
Am I eligible for loan consolidation?
You must be in your grace period or have entered repayment (including those in deferment or forbearance) on the loans chosen for consolidation. All loans chosen for consolidation must be fully disbursed. If you are in repayment,
you must continue to make monthly payments to your current loan holder(s) until these loans have been paid in full by the consolidating lender. If you are unable to make your payments during this process, please contact your loan holders for alternative
arrangements.
6.
Can my delinquent or defaulted loans be consolidated?
If you are delinquent or in default, you will need to contact the loan holder of your delinquent or defaulted account in order to determine if consolidation is an option.
7.
Can I apply for a Federal Consolidation loan with more than one lender at the same time and wait to see who responds first?
No. Federal regulations prohibit you from applying for a Federal Consolidation loan with more than one lender at a time.
8.
What will be my interest rate?
The Federal Consolidation loan interest rate is determined when the loan is originated. With the exception of any outstanding balance representing a HEAL loan, the Federal Consolidation loan interest rate is a fixed rate equal to
the weighted average of the interest rates of the loans being consolidated rounded up to the nearest 1/8th of 1 percent but not exceeding 8.25 percent.
The interest rate on the portion of a Federal Consolidation loan representing a HEAL loan is a variable rate that is adjusted annually on July 1. This rate is set at 3 percent over the bond-equivalent rate for the three-month
Treasury bills auctioned during the three months ending June 30.
9.
Are there fees that I must pay to receive a Federal Consolidation loan?
No, you will not be charged a fee to receive a Federal Consolidation loan.
10.
What are my repayment options?
Your lender offers a choice between three repayment plans, including a Level Payment Plan and two Graduated Income Sensitive Payment Plans. Details regarding the repayment plans offered by your lender are detailed below. You will
be asked to specify the repayment plan that best fits your needs on the Federal Consolidation Loan Application and Promissory Note.
If you do not notify your lender of your choice of repayment plans, your lender will establish a level repayment schedule.
o
Level Payment Plan - This option provides equal monthly payments over the maximum repayment period allowed.
o
Graduated Income Sensitive Payment Plan B - This option allows for interest-only payments for the first one-third of the repayment period. The remaining two-thirds of the repayment period, you pay level monthly payments.
o
Graduated Income Sensitive Payment Plan C - This option allows for interest-only payments for the first quarter of the repayment period. The second quarter, you pay level monthly payments on the balance, which are calculated using the original maximum repayment period allowed. For
the last half of the repayment period, you pay level monthly payments, which are recalculated using the remainder of the original maximum repayment period allowed.
To help determine the best repayment plan for you, use our
Consolidation Calculator, which calculates your approximate monthly payments using each repayment plans' schedule.
11.
How long do I have to repay my Federal Consolidation loan?
The length of your repayment period is dependent on your total student loan debt. This amount is the total of those loans you chose to consolidate plus any educational loans you entered in
Section D.2 Education Loan Indebtedness - Loans You Do Not Want to Consolidate on page 2 of your Federal Consolidation application.
Please note: To calculate your total student loan debt, include only the portion from Section D.2 up to the amount of your consolidation loan. For example, if you are consolidating $15,000, and you listed $20,000 in Section D.2, your total student loan debt is $30,000.
Please note: There is no prepayment penalty on Federal Consolidation loans.
The repayment periods are as follows:
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Maximum Repayment Periods for Federal Consolidation Loans |
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Total Student Loan Debt |
Maximum Repayment Period |
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Less than $7,500 |
10 years |
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$7,500 or more, but less than $10,000 |
12 years |
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$10,000 or more, but less than $20,000 |
15 years |
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$20,000 or more, but less than $40,000 |
20 years* |
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$40,000 or more, but less than $60,000 |
25 years |
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$60,000 or more |
30 years |
* Extended Repayment - If your total student loan debt is more than $30,000, this option allows your maximum repayment period to be extended to 25 years. You still have the option of the Level or either of the Graduated Income Sensitive Payment Plans. If you are interested in this
repayment period extension, you can contact your servicer when you receive your consolidation repayment schedule.
12.
How will I know the exact principal amount of my Federal Consolidation loan and the monthly payment amount due?
After your Federal Consolidation loan has been disbursed, Great Lakes will provide you with a Payment Schedule and Disclosures form. This document will disclose the total amount of your Federal Consolidation loan, the interest
rate, estimated costs, and the repayment schedule you will follow.
13.
What deferments are available on a Federal Consolidation loan?
As a Federal Consolidation loan borrower, you may defer payment of the principal and interest during certain periods. Deferment options available to you depend on two factors: when your Federal Consolidation loan was disbursed;
and if after the consolidation, you still have an outstanding principal or interest balance on a federal student loan disbursed before July 1, 1993. Generally, deferments are authorized for the following situations:
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Situation |
Length of Deferment |
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At least half-time enrollment at an eligible institution of higher education |
No time limit |
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Graduate fellowship/rehabilitation training program |
No time limit |
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If you are conscientiously seeking but unable to find full-time employment in the United States |
Up to 36 months |
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Economic hardship |
Up to 36 months |
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On full time active duty (not including training or attendance at a service school) during a war or other military operation or national emergency or performing qualifying National Guard duty during a war or
other military operation or national emergency |
No time limit |
If you are not eligible for deferment, you may be able to suspend your payments by applying for forbearance. Contact Great Lakes Educational Loan Services, Inc. (Great Lakes) Borrower Services Department at
(800) 236-4300 for more information on deferment or forbearance.
Please note: If your loans were in a deferment or forbearance at the time of the consolidation, you will need to reapply for the deferment or forbearance for your new consolidation loan. Your consolidation loan will be in repayment effective the day of the disbursement.
14.
May I add to my Federal Consolidation loan once it's been made?
Yes, you may add any eligible loan(s) to your outstanding consolidation loan, provided your request is received within 180 days of the date the consolidation loan is disbursed. You may also be eligible for a subsequent Federal
Consolidation loan if you wish to consolidate your existing Federal Consolidation loan with at least one other eligible loan.
Consolidation Procedure
If you decide to apply for a Federal Consolidation loan:
- Log in, and select Launch the Consolidation Loan Assistant from the
Consolidate My Loans menu. The Consolidation Loan Assistant will guide you through the Federal Consolidation Loan Application and Promissory Note and also provide you with the opportunity to sign and submit your application
electronically. If you apply online, we will automatically provide you with your account information for any loans serviced by Great Lakes.
or
- Complete the Federal Consolidation Loan Application and Promissory Note. If you know the lender you would
like to consolidate with, please indicate the lender's name in Section A, Box 10. Mail the completed application to:
Great Lakes Educational Loan Services, Inc.
P.O. Box 8956
Madison, WI 53708-8956
Please note: You must return pages 1, 2, and 3. We can only process applications with original signatures. An application with a faxed or photocopied signature cannot be processed.
Note: Typically, an application for a Federal Consolidation loan is processed and approved in 30-60 days.
Please keep in mind that you should continue to make payments on any loans that are not in deferment or forbearance during your application process.
Questions?
For more information on the Federal Consolidation loan process and to calculate your approximate monthly payments using each Repayment Option, visit
our Borrower portal.
You may also contact the Great Lakes Consolidation Department toll-free at (800) 950-0152, 8 a.m. - 4:30 p.m. Central Time to speak to a consolidation representative.
Frequently Asked Questions
Delinquency Questions
1.
What are the consequences if I default on my student loan?
When a loan defaults, the guarantee agency purchases the loan from the lender and initiates collection activity against you until the loan has been repaid in full. Failure to repay your loan(s) may result in any or all of the
following:
o
Report of the default to a national credit bureau
o
Report of default to the Internal Revenue Service, causing federal tax refunds to be withheld and applied to the loan balance (this is also true for state tax refunds)
o
Garnishment of wages
o
Assignment of loan to a collection agency; which will charge you collection costs and other costs necessary to collect the debt
o
Loss of other federal or state payments
o
Loss of eligibility for further assistance from any Title IV Program
o
Loss of eligibility for repayment options, deferments and interest benefits as described on the promissory note
o
Adverse credit reports which affect your ability to obtain financing for cars, houses, etc.
o
Denial of professional licenses (in some states)
o
Lawsuit
o
Liability for court/legal expenses
2.
What will borrowers receive after he or she pays the loan in full?
The lender will send either a written notice that the loan is paid in full, or the original or a copy of the MPN.
Parent FAQs
Frequently Asked Questions
Loan Processing Questions
1.
What are Federal Parent PLUS Loans?
Federal Parent PLUS loans are part of the Federal Family Education Loan Program. They are low interest loans to parents of dependent, undergraduate students to help pay the cost of attending post-secondary school.
2.
Who can borrow?
You may be eligible for a Parent PLUS loan if:
1. You are a parent of an eligible dependent undergraduate student who is enrolled at an eligible institution on at least a half-time basis.
2. You are a United States citizen or national. If you have a visa, you may still be eligible to receive a loan if you intend to become a permanent resident.
3. You are not in default on a Federal Stafford Loan (formerly Stafford Loan), PLUS, SLS (Supplemental Loans to Students), or Consolidation Loan.
4. You do not owe a refund on a Title IV Grant or are not in default on a Federal Perkins Loan that was received for attendance at the same institution, unless satisfactory arrangements to repay or adjust the grant or loan have been made.
5. The student for whom you are borrowing is maintaining satisfactory academic progress as determined by the school and does not owe a refund or is not in default on a Perkins Loan.
3.
How much can I borrow?
Parents may borrow the full amount of the cost of education for an eligible dependent son or daughter, less any other financial aid for which he or she may be eligible. There are currently no annual or aggregate borrowing limits
in the Federal Parent PLUS Loan Program.
4.
Are there other requirements for participation in the Federal Parent PLUS Loan Program?
Parents borrowing under the Parent PLUS program may be required by the lender to provide evidence of credit worthiness and some borrowers may be required by the lender to secure an endorser for the Parent PLUS loan. Federal law
requires that Parent PLUS loan borrowers must not have an adverse credit rating. All Parent PLUS loan disbursement checks will be sent to the school.
5.
Is the loan insured if I die or become disabled?
If the student for whom the parent obtains a Parent PLUS loan dies, the Department of Education will repay the loan, along with any outstanding interest, thereby satisfying the parent's obligation. If the parent borrower dies or
become totally and permanently disabled, the loan will also be repaid in full. If the other natural parent is a cosigner on a Federal Parent PLUS Loan, the death of the parent borrower does not release the obligation of the cosigner to repay the loan.
6.
What is the interest rate?
Effective for all Parent PLUS loans made on or after July 1, 2006, the interest rate will be fixed at 8.5%. The Federal Parent PLUS Loan Program is unlike the Federal Stafford Loan Program in that the federal government does not
pay the interest while the student is in school. Interest can be paid periodically during periods of deferment or be capitalized and added to the principal.
7.
Are there any other costs to me?
Loan Origination Fee - To help lower the program costs, ED charges each borrower a percentage of the loan amount that is automatically deducted from the disbursement. Federal Default Fee - The agency that guarantees your loans
may charge you a fee equal to one percent of the loan amount. If the federal default fee is charged, it will be automatically deducted from each disbursement. This fee is used to purchase loans from lenders in the event of a borrower's default, death, or
disability.
8.
Can both parents or a parent and stepparent of a dependent student apply for a Parent PLUS loan for that student?
Yes, any combination of parents can borrow as long as all of the parents borrowing are eligible for the Parent PLUS loan.
Frequently Asked Questions
Application Questions
1.
What is the application process?
A parent applying for a Federal Parent PLUS loan must complete an application, which is available either from participating lenders or from the school the student will be attending. In addition to the Parent PLUS loan application, some schools require the parent
borrower to complete the Free Application for Federal Student Aid (FAFSA) to determine eligibility.
Frequently Asked Questions
Repayment Questions
1.
When do I start repayment?
Parent PLUS Loan repayment begins shortly after the loan is fully disbursed regardless of the students enrollment status. Unpaid interest will be capitalized when the loan enters repayment.
2.
How do I get set up to make payments via automatic debit?
Great Lakes offers automatic payment through CheckFree. There are several ways to start using this service:
1. You may download the CheckFree authorization form to complete and mail back. After you log in to this site, choose Electronic Payments > Sign Up For Automatic Payment from the menu on the left.
2. You may call Great Lakes at 1-800-236-4300 for an authorization form to be mailed to you to complete and mail back.
3. The payment coupon book that you receive has a CheckFree authorization form included that you may complete and send in.
3.
If I want to pay via automatic debit, can I prepay more via automatic debit or do I have to send a check for the additional amount)? How do I set that up?
You may call Great Lakes at 1-800-236-4300 to increase the amount you want automatically debited per month. If you only want to send additional payments occasionally, you can also contact Great Lakes for an increase. You can also
send a check to Great Lakes.
4.
Do I receive reminders of their loan balances, loan repayment terms, and repayment options?
No. This information can be found on the borrower's Disclosure/Repayment statement that is sent to them after the loan is guaranteed. To get account information, Borrowers may call Great Lakes at 1-800-236-4300 or use IBIS.
5.
What does Great Lakes send to borrowers for tax purposes?
Each January, Great Lakes sends statements to borrowers indicating the amount of deductible student loan interest for the prior year.
| Frequently Asked Questions
Deferment Questions
1.
Are there times when I can postpone my payments?
Yes, there are certain authorized periods of deferment, during which you may temporarily stop making payments. Each deferment has specific eligibility requirements. For Subsidized Stafford Loans the federal government pays the interest
during a deferment Unsubsidized Stafford Loans continue to accrue interest during deferments. Refer to the following chart for deferment eligibility:
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Consolidation Questions
1.
I consolidated all of my kids' loans already, but upon hearing that the interest rates have dropped to an all-time low, I want to consolidate again. Can I consolidate again?
No, not unless you have taken out a new Title IV loan after consolidating, or have a loan eligible for consolidation that wasn't included in the original consolidation.
2.
What is a Federal Consolidation loan?
A Federal Consolidation loan is one of several loans in the Federal Family Education Loan (FFEL) program. This loan offers eligible borrowers the opportunity to consolidate all or some of their outstanding educational loans into a single new
loan, even if present student loans are held by more than one lender and are of different types.
3.
Which loans can I consolidate?
o
FFEL Subsidized Federal Stafford Loans, formerly Guaranteed Student Loans (GSL)
o
Direct Subsidized Stafford Loans
o
FFEL Unsubsidized Federal Stafford Loans
o
Direct Unsubsidized Stafford Loans
o
Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students (ALAS) and Student PLUS Loans)
o
Federal Perkins Loans, formerly National Defense/National Direct Student Loans (NDSL)
o
Health Professions Student Loans, including Loans for Disadvantaged Students
o
Health Education Assistance Loans (HEAL)*
o
Federal Insured Student Loans (FISL)
o
Federal Parent PLUS Loans (note that you may not consolidate your parent's PLUS loan with your own)
o
Federal Direct Parent PLUS Loans
o
Federal Graduate/Professional PLUS Loans
o
Direct Graduate/Professional PLUS Loans
o
Subsidized Federal Consolidation Loans
o
Direct Subsidized Consolidation Loans
o
Unsubsidized Federal Consolidation Loans
o
Direct Subsidized Consolidation Loans
o
Direct Unsubsidized Consolidation Loans, including Direct PLUS Consolidation Loans
o
Federal Nursing Loans
Some lenders do not consolidate HEAL loans. Contact your lender for more information.
Generally, you must be in your grace period or have entered repayment on the loans chosen for consolidation. All loans chosen for consolidation must be fully disbursed. If you are in repayment, you must continue to make monthly payments to
your current loan holder(s) until these loans have been paid in full by the consolidating lender. If you are unable to make your payments during this process, please contact your loan holders for alternative arrangements. If your loans are currently in an
"in-school" status, you may submit a written request to each lender or servicer of these loans to waive the grace period and begin immediate repayment. The implementation of this request, if granted, will result in irrevocable waiver of any grace period on
these loans.
5.
What will be my interest rate?
The Federal Consolidation loan interest rate is determined when the loan is originated. With the exception of any outstanding balance representing a HEAL loan, the Federal Consolidation loan interest rate is a fixed rate equal to the
weighted-average of the interest rates of the loans being consolidated rounded up to the nearest 1/8th of 1% but not exceeding 8.25%. The interest rate on the portion of a Federal Consolidation loan representing a HEAL loan is a variable rate that is adjusted
annually on July 1. This rate is set at 3 percent over the bond-equivalent rate for the three-month Treasury bills auctioned during the three months ending June 30.
6.
Are there fees that I must pay to receive a Federal Consolidation loan?
No, you will not be charged a fee to receive a Federal Consolidation loan.
7.
Can I apply for a Federal Consolidation loan with more than one lender at the same time and wait to see who responds first?
No, federal regulations prohibit you from applying for a Federal Consolidation loan with more than one lender at a time. Please note that if your FFEL program loans are held by only one lender and this lender offers consolidation loans, you
must request a consolidation loan from that lender. If multiple lenders hold your FFEL program loans, you may apply for a Federal Consolidation loan with a consolidation lender of your choice.
8.
How long do I have to repay my Federal Consolidation loan?
The length of your repayment period is dependent upon your total student loan debt. This amount is the total of those loans you choose for consolidation plus "other education loans" you owe, but will not be included in your consolidation loan.
The repayment periods are as follows:
*Maximum repayment periods exclude authorized periods of deferment and forbearance.
9.
What "other education loans" may I include when determining my repayment period?
"Other education loans" are those made by an organization under a public or private student loan program exclusively for the purposes of financing the borrower's post-secondary education. For the purposes of determining the borrower's
repayment terms, the sum of the "other education loans" may not exceed the amount of the Federal Consolidation loan and may not include any non-Title IV education loans currently in default.
10.
What are my repayment options?
Your lender offers a choice of repayment plans including a level payment plan and three different graduated income sensitive repayment plans. Specific details regarding the repayment plans offered by your lender are provided under the section
titled "Repayment Options" in this booklet. You will be asked to specify the repayment plan that best fits your needs on the Federal Consolidation Loan Application and Promissory Note.
11.
What deferments are available on a Federal Consolidation loan?
A Federal Consolidation loan borrower may defer payment of principal and interest during certain periods. Deferment options available to the borrower depend on two factors: when the borrower's Federal Consolidation loan was made and whether
the borrower had an outstanding principal or interest balance on a FFELP loan before July 1, 1993. Generally, deferments are authorized for the following situations:
Contact the Great Lakes Borrower Services Department at 1-800-236-4300 for more information on deferment eligibility.
12.
May I add to my Federal Consolidation loan once it's been made?
Yes, you may add any eligible loan(s) to your outstanding consolidation loan, provided you make the request within 180 days of the date the consolidation loan is made. You may also be eligible for a subsequent consolidation loan if you wish to
consolidate your existing consolidation loan with at least one other eligible loan.
13.
How will I know the exact principal amount of my Federal Consolidation loan and the monthly payment amount due?
After your Federal Consolidation loan has been disbursed, Great Lakes will provide you with a Disclosure Statement and Repayment Schedule. This document will disclose the total amount of your Federal Consolidation loan, the interest rate,
estimated costs, and the repayment schedule you will follow.
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