University of Michigan – Flint
Office of Financial Aid
277 University Pavilion
Flint, MI 48502 – 1950
Phone: (810) 762-3444 - Fax: (810) 766-6757
Email: Financial_Aid@list.flint.umich.edu
Frequently Asked Questions about Direct Loan Consolidation
To consolidate your Federal Direct Stafford Loans, go to www.dlssonline.com/consolidatenow/welcome.asp
For more information on consolidation see www.umflint.edu/resources/offices/financial_aid/consolidation.php
Q: Why should I borrow through the Direct Loan Servicer and not a private company?
A:
In-school consolidation is a benefit available only to Federal Direct Loan borrowers through the
U.S. Direct Loan Servicer; we advise that you consolidate through the Direct Loan Servicer,
which is operated by the federal government, and not through private companies. If you
consolidate with other companies, you may lose some of your loan benefits. Beware of mail
solicitations from private companies offering great deals or severe warnings. Many of these
solicitors use language that makes them appear to be government-operated, when in fact, they
are not.
Q:
Do I need to be graduating to consolidate?
A:
No. In fact, with the current low interest rates, it makes sense to consolidate while you are in
school. Many students think they must be graduating to consolidate, but you can consolidate
while in school at a lower interest rate (currently 4.7% while in school) and keep all your loan
benefits (i.e., make no payments while in school and maintain your deferment, forbearance,
and cancellation provisions). Recent changes in legislation will eliminate in-school loan
consolidation after June 30, 2006. If you do not consolidate before then, you risk losing the
ability to lock-in the current low interest rates to potentially save hundreds of dollars in the
future.
Q: Will I enter repayment right away if I consolidate while in school?
A:
No, you will not have to make payments while you are still in school and you will maintain