Federal Student Loan FAQs

student loan article

What is a Federal Consolidation Loan?

A Federal Consolidation Loan allows students and parents to refinance their existing federal education loan debt into one new low fixed interest rate loan. In addition to the low interest rate, when you consolidate through ELF you have the option of lowering your monthly payment by extending your payment term without any prepayment penalty.

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What are the eligibility requirements to consolidate my federal student loans?

The following outlines some of the basic eligibility criteria to qualify for a Federal Student Loan Consolidation through ELF:

  • All loans to be included in the consolidation must be in a grace period or repayment status (including loans in a deferment or forbearance status).
  • Loans in a default status are NOT eligible for consolidation
  • Loans in an in-school status are NOT eligible for consolidation
  • The total combined balance of all eligible federal student loans to be included in the consolidation must be at least $25,000.

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When can I consolidate?

Borrowers are eligible for federal student loan consolidation when all of the loans selected for consolidation are in a grace period or in repayment status (including loans in deferment or forbearance).

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What loans are eligible for consolidation?

The following loan types are eligible for consolidation:

  • FFEL Subsidized and Unsubsidized Stafford Loans (SS/US)
  • Direct Subsidized and Unsubsidized Stafford Loans (DSS/DUS)
  • FFEL PLUS Loans
  • Direct PLUS Loans
  • Graduate PLUS Loans
  • FFEL Consolidation Loans
  • Direct Consolidation Loans (Variable and Fixed)
  • Federal Perkins Loans
  • Supplemental Loans for Students (SLS)
  • Health Professions Student Loans (HPSL)
  • Federal Nursing Loans
  • Federal Insured Student Loans (FISL)
  • Guaranteed Student Loans (GSL)

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How is the interest rate determined?

The interest rate on a Federal Consolidation Loan is set by calculating the weighted average of the existing loans being consolidated rounded up to the nearest one-eighth percent, not to exceed 8.25%. The loan carries a fixed interest rate for the life of the loan.

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Can I consolidate my private and federal student loans together?

No. We cannot consolidate your private and federal student loans together. Federally-backed student loans carry certain benefits that private student loans do not. Most of the federal benefits that come along with your federal student loans would be lost if they were combined with your private student loans.

You can still consolidate both your private student loans and your federal student loans separately. And with the help of our highly trained loan consultants, we can make the process quick and simple for you.

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I am currently in deferment/forbearance, am I still eligible to consolidate?

Even if you are currently delaying your payments, you may still be eligible to consolidate.

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What will be the length of my repayment term?

The length of your repayment term is based on guidelines established by the federal government. The repayment term is based on the total balance of your student loans to be consolidated not to exceed the maximum term allowed (30 years).

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Am I obligated to extend my repayment term?

No. Federal statute sets your repayment term based on your total balance consolidated. You can shorten your term to any length you choose. At least initially, most borrowers go with the longest repayment term option to create a safety net in case any unexpected financial needs arise. Of course there are no pre-payment penalties so you can pay the loan off as quickly as you are able.

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Are there different types of repayment plans?

There are a few options to choose from:

  • Standard Repayment – A level repayment option wherein the payment amount remains the same throughout the entire life of the loan.
  • Graduated Repayment – This repayment plan supplies you with the lowest monthly payment to start, and gradually increases over time.
  • Extended Repayment – If your balance falls between $30,000 and $39,999 you are able to extend your term an additional 5 years (from 20 to 25 years). This option can be used with the standard or graduated payment plan.

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