Eligibility for Federal Student Loan Consolidation
Most who’ve “been there, done that” would agree that the hardest part of securing a federal student loan debt consolidation is qualifying for it. After that, the process is easy. So to find out if you have eligibility for federal student loan consolidation, you’ll need the information required and to have your ducks in a row before you apply.
The first requirement for federal student loan consolidation eligibility is to be finished with school. So if you’re still in school, you do not qualify. Alternatively, you can have dropped out or be a half-time student. If you’ve graduated, you need to have fully disbursed, meaning you have finished all coursework and requirements and received your graduation paperwork and diploma.
The easiest of the student loan debt consolidation options from federal loans is if your loans were PLUS loans. These can be consolidated immediately upon graduation or leaving school. Most other federal student loan consolidation eligibility loans require that you be done with school for a specific amount of time (usually 3-6 months).
If you have received Direct Consolidation loans in the past or have a Federal Family Education Loan (FFEL), then you will likely have eligibility for federal student loan consolidation.
Interest rates for federal loans are capped (currently at 8.25%), so they cannot go higher. If your loan interests are considerably lower than this, you might want to think twice about consolidation. The good news is that the lower interest rate you currently have may be variable or subject to change annually. If that’s the case, know that the lowest student loan interest rate may be offset by the fixed rate of the federal consolidation–the rate you get now will be fixed for the lifetime of the loan, no changes. If your credit is good and you don’t anticipate it getting much better in the next few years, this may be a good deal.
Whatever your needs, talk to your financial adviser before making any decisions about federal student loan consolidation eligibility.