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INSTITUTION
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I DENT I FI ERS
DOCUMENT RESUME
HE 036 048
Student Loans Driving You Crazy? A Borrower’s Guide to Direct
Consolidation Loans.
Office of Federal Student Aid (ED), Washington, DC.
2003-00-00
9P
-
Guides - Non-Classroom (055)
EDRS Price MFOl/PCOl Plus Postage.
*College Graduates; *Debt (Financial); Higher Education;
*Loan Repayment; Student Financial Aid; Student Loan Programs
*Student Loan Consolidation Program
ABSTRACT
students can use to combine one or more student loans into a new loan. Things
to consider before seeking a consolidation loan are outlined. Direct
consolidation loans offer a number of advantages; they are free, result in
one lender and one monthly payment, and offer flexible repayment options with
the possibility of a lower interest rate. Eligibility requirements are
described, and a list of eligible loan types and those that are not eligible
is provided. (SLD)
This booklet describes the Direct Consolidation Loan program
Reproductions supplied by EDRS are the best that can be made
from the original document.
Student Loans Driving You Crazy?
BEFORE YOU DECIDE
Here are things to consider when deciding whether
consolidation is right for you:
THE INTEREST RATES OF EACH LOAN THAT
The interest rate for a Direct Consolidation Loan is based on the
weighted average of the interest rates of the loans that you
consolidate. It is fixed for the life of the loan and cannot exceed
8.25 percent. If a Direct Consolidation Loan would offer a lower
rate than your current loans, you may want to consolidate.
YOU WANT TO CONSOLIDATE -
HOW MUCH YOU CAN AFFORD
TO PAY EACH MONTH -
If you are having trouble meeting your monthly payments, have
exhausted your deferment and forbearance options, and want to
avoid default, consolidation may be right for you. If you
consolidate, you may reduce your monthly payment amount by
extending your repayment period.
HOW MUCH YOU'RE WILLING TO
PAY OVER THE LONG TERM