Just a reminder to all recent medical school graduates that
the deadline to apply for the Special Direct Consolidation Loan is June 30,
2012. If you haven’t applied already, it’s not too late. I think if you can
take advantage of this opportunity, you should.
If you are eligible you should have received an email
from the Department of Education and/or your loan servicer. Don’t ignore it! If
you haven’t received an email informing you of your eligibility, the easiest
way to check is to login to StudentLoans.gov.
If you are eligible there will be a message stating so on the top right of the
page. You can also apply for the loan from this page as well.
If you want to check for yourself if you are eligible
then login to the National Student Loan Data
System (NSLDS) (I’ve mentioned this site before) and look at the detail of
each loan. The requirements and full information for the Special Direct
Consolidation Loan can be found on the Department of Education website here,
but I’ll try to simplify it.
The point of any consolidation loan is to combine several
loans (at least more than one) into only one loan to simplify your payments. I
am not a fan of the Traditional Direct Consolidation Loan because it increases
your repayment term and also averages your interest rate, so you will end up
paying a lot more than if you just kept them separate. I can see this loan possibly
being useful if every individual loan you had was serviced by someone different
and you would have to send in many different checks, but even then it would
just take a few minutes to set up an automatic withdrawal from your checking
for each one.
Anyway, the Special Direct Consolidation Loan does not
have any of these downsides. It does not increase the repayment term and it
keeps the same interest rate for each loan that was consolidated. Also as a
BONUS you get a 0.25% interest rate reduction on EACH loan that was
consolidated, just for consolidating! I don’t see any reason not to do this.
So, if you are checking your loans yourself to see if you
are eligible you need to have two things:
First, you need to have a student loan owned by the Department
of Education and serviced by a Department servicer. Most people have this. It
will tell you who owns and services the loan on the loan detail page on the
NSLDS. (Click on the number to the left of the loan in the list to get to the
individual detail page.)
Second, you need to have a commercially-owned (not owned by the Dept. of Ed.) FFEL loan that
is serviced by that lender or some other commercial servicer that lender hired.
FFEL stands for “Federal Family Education Loan” which is just the fancy heading
that Stafford (subsidized and unsubsidized) and PLUS (grad and parent) loans
fall under. So basically you need a Stafford or PLUS loan not owned by the
government. You can tell this from the NSLDS detail page because it won’t say
Dept. of Ed. anywhere for that loan.
Which loans you have and who owns and services each loan
will be different for everybody. Your loans probably got sold at least once
during medical school and may be owned by someone different than when you first
took it out. If it ended up that all of your loans were owned by the Department
of Education when you graduated, then you won’t be eligible. However, if you
have any undergraduate loans still owned by a commercial lender, you should be
eligible and can benefit from this. But hurry! The deadline is approaching.
Source:
http://studentaid.ed.gov/PORTALSWebApp/students/english/specialconsolidation.jsp
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