Q: If a fourth year student wants to consolidate her Stafford loans, does she have to pay back the loan immediately or is it subsidized until she graduates and forfeits the six month grace period?
A: Starting July 1, 2006, students can only consolidate once and they cannot do an “in school” consolidation. Your student will have to wait until she leaves school before she consolidates. If she consolidates, she does not forfeit her six-month grace period.
Q: If a student has a Stafford loan that they are not making payments on currently, can they or should they refinance?
A: The way a student could “refinance” their Stafford loan would be to consolidate it. To consolidate the student would have to be out of school or carrying an academic workload of less than part time.
Q: Can students consolidate while in school and, if they can, can they consolidate those notes again when school is done?
A: The student can only consolidate his loan(s) if they are out of school or if their academic workload is less than one half the normal full time workload.
Q: I have two clients whose children have taken out subsidized and unsubsidized Stafford loans over the past few years. I have advised both of them to consolidate on line before June 30th and disregard the contradictory info from the financial aid office. Am I correct in advising them to do this as June 30th is around the corner?
A: Assuming these students have recently graduated or are still in school, they should consolidate their Stafford loans as soon as possible.
Q: My son is starting university this August and we are entitled to subsidized and unsubsidized Stafford loans as part of the award package. Should I sign the application before June 30th, and, if I do, will I receive a better rate? Same question re PLUS loans.
A: Stafford and PLUS loans have fixed rates that do not change from year to year.
Q: I hate to sound so mercenary, but do we get any fee for the loan consolidation?
A: Not on federal loans.
Q: If a student has only one loan for 16K that is still in deferment and the student is leaving school after his freshman year and unlikely to return, should we look at consolidating this loan?
A: The first thing you have to do is determine if the loan is a federal student loan or a private student loan. If the loan is federal, then you should consolidate and see if it is possible to extend the term of the loan.
