Loan consolidation
For a list of participating consolidating lenders follow this link..
What is a Federal Consolidation Loan?
The Federal Consolidation Loan Program lets you combine your various student loans into a new consolidation loan, often resulting in lower, more affordable payments.
Am I eligible for loan consolidation?
You are eligible for a consolidation loan if you are currently in a grace
period, in repayment, or if you are in default and you have made and fulfilled
satisfactory repayment arrangements with the holder of each defaulted loan
being consolidated.
Which loans are eligible for consolidation?
- FFELP loans (Stafford, PLUS, GRAD PLUS, SLS, and consolidation loans)
- FDLP loans (Stafford, PLUS, and consolidation loans)
- FISL loans
- Perkins loans
- Health Professions Student Loans (HPSL), including Loans for Disadvantaged Students (LDS)
- Nursing Student Loans (NSL)
- Health Education Assistance Loans (HEAL)
Can loans be added after consolidation?
You may add any eligible loans made before or after the date of consolidation
(that were not included in the consolidation), provided the request is made
within 180 days of the date the consolidation loan is disbursed.
How much will I pay in interest and fees?
There is no fee to obtain a consolidation loan.
Except for any portion of the federal consolidation loan that is attributable to a HEAL loan, the loan will bear simple interest at an annual rate which is fixed for the term of the loan. The interest rate is the weighted average interest rate of all loans being consolidated, rounded upward to the nearest higher one-eighth of one percent, not to exceed 8.25 percent. If a portion of your consolidation loan is attributable to a HEAL loan, the interest rate is a variable rate and is adjusted annually on July 1. There is no maximum interest rate on the HEAL portion of a federal consolidation loan.
How long do I have to pay back my consolidation loan?
| Total student loan indebtedness | Maximum term |
|---|---|
| $0 - $7,500 | 10 years |
| $7,500 - $9,999 | 12 years |
| $10,000 - $19,999 | 15 years |
| $20,000 - $39,999 | 20 years |
| $40,000 - $59,999 | 25 years |
| $60,000 or greater | 30 years |
The total student loan indebtedness is the sum of the consolidation loan plus the amount outstanding on your other student loans.
What is a disclosure statement?
Your lender will send you a Notice of Loan Guarantee and Disclosure Statement
when your loan proceeds are disbursed. This statement identifies the specific
terms of your loan, the amount of your loan, and the interest rate you will
pay.
How will my loan be disbursed?
Your lender will disburse a Federal Consolidation Loan upon review and approval
of the signed application and promissory note and completed verification
certificates from the holder(s) of all loans to be consolidated. In disbursing
the loan, your lender will pay to each holder the outstanding principal balance
plus any accrued unpaid interest, late charges (as certified on the verification
certificate), and collection costs as applicable.
When does repayment begin?
Repayment will begin within 60 days after the disbursement of your Federal
Consolidation Loan. Payments will be scheduled in monthly installments according
to the disclosure statement.
What are the consequences of default?
If you do not meet your obligation to repay your student loan, ECMC and/or
the U.S. Department of Education will proceed to collect your loan to the
full extent of the law. The holder of your defaulted loan may take any of
the following actions to collect your outstanding debt, including legally
permissible collection costs:
- report your default to national credit bureau organizations
- withhold your state and federal income tax refunds and lottery winnings
- garnish your wages
What are my repayment options?
You may choose either a Standard, Graduated, or Income-Sensitive payment
plan. The repayment period will last 10 to 30 years depending on your student
loan debt.
Contact Information
Contact ECMC Customer Service (888.221.ECMC (3262) if you have questions about loan consolidation.
If you are in default, contact ECMC Collections (800.780.7997) if you have questions about loan consolidation.
For a list of participating consolidating lenders follow this link..
