| Under the Federal Consolidation Loan Programs two or more eligible loans
may be combined into a single debt. Eligible programs are: Federal Stafford Loan
(subsidized and unsubsidized), PLUS, Perkins Loan (formerly NDSL), Supplemental Loans for
Students (SLS), Consolidation Loan, Health Professions Student Loan (HPSL), Health
Education Assistance Loan (HEAL), and Nursing Student Loans. Married students can
consolidate their student loans. Repayment period length varies from 10 to 30 years
depending upon the amount of the Federal Consolidation Loan - Various repayment plans are
available.
Borrower's loans must be in either grace period or repayment status to be eligible for
Consolidation.
* Prohibits an eligible lender from discrimination against any borrower seeking a
consolidation loan:
(1) based on the number or type of eligible student loans the borrower seeks to
consolidate;
(2) based on the type or category of institution of higher education that the borrower
attended;
(3) based on the interest rate to be charged with respect to the consolidation loan; or
(4) with respect to the types of repayment schedules offered to such borrower.
*The Higher Education Amendments of 1998 changed the interest rate for Federal
Consolidation loans to the weighted average of the existing loans, rounded up to the
nearest 1/8 of one percent; or 8.25% (Section 427A of the Higher Education Act of 1965).
This pertains to loans made on or after October 1, 1998 and before July 1, 2003.
* Makes such consolidation loans available notwithstanding any pending application by a
student for a direct consolidation loan, upon the student's withdrawal of such
application.
* Revises HEA need analysis requirements to exclude from the calculation of available
family income, and so reduce the family contribution for dependent or independents
students by, the amount of the Hope Tax Credit taken by the student, the student's parent,
or the student's spouse (thus providing that students will not receive reduced financial
aid as a result of qualifying for and receiving the new Hope Tax Credits under the
Internal Revenue Code).
* Reduces the amount of certain funds available for administrative expenses under HEA
student assistance provisions. |
