Consolidation

Consolidation is the combining of existing student loans into one new loan. Generally, this results in lower monthly payments, but higher interest costs.

Married couples are now allowed to consolidate their individual loans if they agree to be held jointly and separately liable for repayment without regard to the amount of the individual indebtedness and any future changes in their marital status.

The interest rate on the unpaid principal balance for Consolidation Loans is the lesser of the weighted average of the interest rates on loans being consolidated, rounded up to the nearest higher one-eighth of 1 percent or 8.25%.

If you took out your first loan before July 1, 1993, and you consolidate after July 1, 1993, you will be eligible for fewer deferments.

For more information about consolidation, contact your lender.