WARNING: It is very dangerous to consolidate federal loans into a private consolidation loan.
You will lose your rights under the federal loan programs once you choose to consolidate with a private lender.
APPLYING FOR DIRECT LOAN CONSOLIDATION The Department generally requires all borrowers to apply for Direct Loan consolidation using the web site. It is very important to review this sheet and check to make sure all of the loans you wanted to consolidate are included in the new consolidation loan.
(Click espanol to find a Spanish version of the on-line application). Be sure to meet the deadline for responding if you think there are problems with the consolidation or if you have decided you do not want to go forward.
Further, borrowers with joint FFEL consolidation loans, according to the Department, may not reconsolidate into Direct Loans and therefore are not eligible for public service loan forgiveness. The fixed rate is based on the weighted average of the interest rates on the loans at the time of consolidation, rounded up to the nearest one-eighth of a percentage point.Both spouses are jointly liable for the loan and both must request IBR.Problems often arise if the ex-spouses are no longer in contact.These include deferment, forbearance, cancellation, and affordable repayment rights.Also, federal consolidation loans generally have lower interest rates.