Alternative School Loans

When you are looking for a school loan consolidation to combine your many student loans into one payment, there are many rules you must follow, especially if your loans are federal loans. Here, we describe some of these rules to help you navigate the maze of student loan consolidation.

There are two different programs for school loan consolidation, namely, the Federal Family Education Loan (FFEL) and Direct Consolidation Loan Programs. It is important to know the difference between the two. First, any consolidation of student loans that you want combined must be accepted by the Program of Direct Consolidation Loans. Federal Family Education Loan lenders may accept all eligible loans for FFEL consolidation, but some lenders may not include non-FFEL loans in the consolidation of school loans. However, if a loan is not accepted within the federal family education loan consolidation, lenders may offer other programs school loan consolidation of these debts.

Lenders school loan consolidation program under the Federal Family Education Loan Program must provide for reimbursement of several. These include the standard repayment plan, the graduated repayment plan, an extended repayment plan, and a repayment plan geared to income sensitive. Keep in mind that although these four repayment plans are offered by all FFEL lenders, the actual reimbursement may vary. For example, the repayment scheme is proportional to income sensitive borrower's income and total debt into account.

With the Direct Loan Program, we offer the standard repayment plan, the graduated repayment plan, extended repayment plan, repayment plan and proportional to income. With this repayment plan in proportion to income, such payment will be based on a formula that holds the borrower's income, family size, and the total amount of the loan account.

If you default on a FFEL consolidation loan, some lenders may allow you to include the outstanding loan into a new consolidation loan. However, all lenders offer this option. The direct loan program also has provisions for consolidating outstanding loans into new loans. If you are eligible to consolidate your outstanding loans into a new loan, you can regain eligibility for federal student aid.

Under the Direct Consolidation Program, you can consolidate your loans while you are enrolled in school. If you are eligible for consolidation at the school, you can get a grace period of six months before repayment begins. You may also be eligible for lower interest. If you have only FFEL loans, you may still qualify for a consolidation and a grace period while remaining in school through the consolidation loan program direct. With the FFEL consolidation program, you can consolidate your debts after leaving school, and all of your loans must be in grace or repayment period.