Student Loan Consolidation Frequently Asked Questions

Why do people consolidate their federal student loans?
Federal student loan interest rates are at an all time low. When consolidating student loans, you lock in the interest rate for the duration of the consolidation loan. So it saves you money!

How is my interest rate calculated for a consolidation loan?
Financial Aid will take a weighted average of the interest rates on all of the loans to be consolidated and round up to the nearest 1/8 of 1%. The interest rate reached with this calculation can then be reduced up to an additional 1.25% if you take advantage of the H@LO Rewards Program.

Are there prepayment penalties?
NO! There is no penalty for prepaying your consolidation loan at any time. In fact, every penny you pay over the amount owed each month is automatically applied towards the principal, NOT interest.

Are there any negative consequences to student loan consolidation?
Yes and No. If you take a longer amount of time to pay off your student loan debt, you will pay more interest over the course of loan repayment. However, because there are no prepayment penalties and it is a simple interest loan, if you continue making the same payments you were making prior to loan consolidation, you will not pay more in interest and pay off the loan even quicker than your previous loan.

See If You Qualify Click Here.

Will I incur any fees and/or charges consolidating my student loans?
You will not incur any fees, costs, or charges for consolidating your student loan debt. The US department of Education does not assess any fees to the borrower on the consolidation loan. Financial Aid does NOT charge you any fees to consolidate your debt.

Why choose Financial Aid
In addition to the the huge savings from consolidating your student loans, Financial Aid offers the best rewards package available anywhere. The HALO Rewards Package can reduce your interest rate by an additional 1.25%.

Here's how:

• 1% Rate Reduction after 36 on time payments for borrowers with balances above $20,000.

• .25% rate reduction for payments automatically withdrawn from a checking account.

Can I refinance a consolidation loan?
Yes and No. The U.S. Dept of Education does not allow a borrower to refinance a consolidation loan. However, if you have additional federal loans not included into the original consolidation, those loans may be added and recalculated into a new Federal Consolidation Loan.

Am I still eligible for the same Federal benefits?
Yes! Because student loan consolidation is a federal program, you are still entitled to benefits such as deferment, forbearance, and tax deductible interest. The loan is also government guaranteed as well as federally insured.

Additionally, if you decide to consolidate your Perkins Loan(s), you will lose the interest subsidy on this portion of your debt. However, because the interest rate on your Perkins Loan is 5%, the inclusion of the Perkins Loan(s) into your consolidation loan may have a positive impact on the calculated average used to determine the interest rate on your consolidation loan.

See If You Qualify Click Here.

Is the interest rate on the consolidation loan fixed or variable?
Financial Aid only offers fixed interest rate consolidation loans, which means your interest rate will never change for the life of the loan, even when interest rates go up.

Who services your loans?
Our servicing partner is Great Lakes Higher Education. They have been in the student loan business for 35 years and will coordinate the finances of your consolidation.

What loans are eligible for student loan consolidation?
Following is a list of eligible federal student loans:

• SS - Subsidized Federal Stafford Loans & Guaranteed Student Loans (GSL)
• DSS - Direct Subsidized Stafford Loans
• DUS - Direct Unsubsidized Stafford Loans
• DPLUS - Direct PLUS Loans
• DUCON - Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans
• US - Unsubsidized and Nonsubsidized Federal Stafford Loans
• NSL - Federal Nursing Loans
• HEAL - Health Education Assistance Loans
• PERK - Federal Perkins Loans, formerly Nations Defense/National Direct Student Loans (NDSL)
• PLUS - Federal PLUS (Parent) Loans
• SCON - Subsidized Federal Consolidation Loans
• UCON- Unsubsidized Federal Consolidation Loans SLS- Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students (ALAS) and Student PLUS Loans)

Is it possible to include private loans into my Federal Consolidation loan?
Yes and No. Private loans are not eligible for the FFELP Consolidation loan, however, non-Federal student loans can still count towards your cumulative loan balance, which enables one to extend the repayment term.

How do I sign up for auto-debt withdrawal?
Once one receives their new coupon booklet, information is provided to sign up for the auto-debt withdrawal option and reduce the interest rate .25%. One may indicate the date of the month they'd want the payment withdrawn. You may choose the following dates: 5th, 10th, 15th, 20th, and 25th.