Consolidation Information

Federal Loans

In-School Consolidation (only offered through Direct Loans and programs ENDS on July 1, 2006)

In-school consolidation is available to those students who are currently enrolled at least half-time at a Direct Lending school (OSU) and have loans (either Direct Loans or FFEL Stafford loans) to consolidate.

• You will retain 6 month grace period after graduation (must consolidate before graduation)
• You have different repayment plans to choose from (standard, extended, graduated & income contingent)
• You can receive an interest rate reduction for on-time payments automatically deducted from your bank account.
• You make only one payment each month (when consolidating several loans with different lenders).
• There are no prepayment penalties.
• There are no credit checks.

Direct Loans for consolidation: www.loanconsolidation.ed.gov 800-557-7392

For Graduating Students:

A graduating student can consolidate student loans while in-school with the same benefits as listed above. To choose the best option for you, beware that:

• You can consolidate your Direct Loans and FFEL Stafford loans through any lender that you have used to borrow funds.
• You can only consolidate after you graduate with lenders other than Direct Loans.
• Your payments start 30-90 days after the consolidation is complete (little to no grace period).
• You can still lock in lower fixed interest rate.
• You can receive an interest rate reduction for on-time payments automatically deducted from your bank account.
• You make only one payment each month (when consolidating several loans with different lenders).
• You have different repayment plans to choose from (standard, extended, graduated & income contingent)
• There are no prepayment penalties.
• There are no credit checks.

YOU MUST START PROCESS BY MAY 6, 2006 TO GET THE LOWER INTEREST RATE FOR BEING IN SCHOOL.

Perkins and Health Professions Loan Borrowers

If you have these types of loans, you will need to make the decision whether or not to consolidate them with your other federal loans. These loans already have a fixed interest rate of 5% and there are also loan forgiveness programs, depending on your degree, that can be lost if you consolidate these loans.

Parent Loans

Parent loan consolidation is credit-based and in case of adverse credit, a co-signor may be required. Some items to consider include:

• Parents can consolidate parent loans and their own (not their child's) student loans.
• You have different repayment plans to choose from (standard, extended and graduated)
• You can receive an interest rate reduction for on-time payments automatically deducted from your bank account.
• There are no prepayment penalties.

If you have parent loans through more than one lender, be sure you research different lenders to find the best consolidation option for you.

Non-Federal Loans

Alternative Student Loans:

As a borrower of alternative student loans (non-federal loans), you have the option of consolidating; however, it is a strong recommendation that you do not consolidate alternative loans with your federal loans. Alternative student loans do not have the same benefits as do federal student loans. You don't have the option of deducting payments from your taxes and you lose loan forgiveness options. Federal loans become 'consumer loans' (credit based loans that are similar to credit cards, auto loans and mortgages - not your federal student loans), with the conditions that these loans may have (i.e. variable interest up to whatever the lender determines, limited options on repayment plans and no options for deferment or forbearance).

Sample Repayment Charts

Student Loans:

At the current in-school consolidation rate of 4.7% interest and $16,000 borrowed in student loans:

Note 1: This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on the gradation factor in the graduated repayment rules.

At the new rate of 6.8% interest and $16,000 borrowed in student loans:

Note 1: This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on the gradation factor in the graduated repayment rules.

Parent Loan

At the new rate of 8.5% interest and $16,000 borrowed in parent loans:

Note 1: This is an estimated monthly repayment amount for the first two years of the term and total loan payment. The monthly repayment amount will generally increase every two years, based on the gradation factor in the graduated repayment rules.

Repayment information gathered from Federal Student Aid online calculator. This publication was prepared on the basis of the best information available at eh time it was printed (March 2006). However, all information is subject to change without notice or obligation.