Special Direct Consolidation Information Special Direct Consolidation Information

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Special Direct Consolidation FAQ

What is the Special Direct Consolidation Loan opportunity about?
Special Direct Consolidation Loans are part of President Obama's "Help Americans Manage Student Loan Debt" initiative. A Special Direct Consolidation Loan centralizes your eligible federal loans under one servicer so you can better manage your payments without extending your repayment term and paying more in interest over time.
How are Special Direct Consolidation Loans different from traditional Direct Consolidation Loans?
For the differences in the two types of Direct Consolidation Loans, please visit www.studentaid.ed.gov/specialconsolidation.
What repayment options are available for Special Direct Consolidation Loans?

You can choose any of the following repayment plans to repay your Special Direct Consolidation Loan:

  • Standard Repayment Plan
  • Graduated Repayment Plan
  • Extended Repayment Plan
  • Income-Contingent Repayment (ICR) Plan
  • Income-Based Repayment (IBR) Plan

Note that if your Special Direct Consolidation Loan includes FFEL Consolidation Loans that repaid parent PLUS loans, the portion of your Special Direct Consolidation Loan that paid off those loan types may not be repaid under the IBR or Pay As You Earn Plans. However, that portion of your loan may be repaid under the ICR Plan.

If your Special Direct Consolidation Loan includes parent FFEL PLUS Loans that you obtained to pay for your child's education, the portion of your Special Direct Consolidation Loan that paid off those loan types may not be repaid under the IBR, ICR or Pay As You Earn Plans.

What is the repayment term for a Special Direct Consolidation Loan?
Each loan you consolidate will retain its original repayment term - the repayment term does not start over when you receive a Special Direct Consolidation Loan. That is, time you have already spent in repayment on the commercially-held FFEL Program loans that you consolidate will count toward the repayment term for your Special Direct Consolidation Loan. For example, if you have already made 3 years of loan payments under a 10-year Standard Repayment Plan before consolidating a Federal Stafford Loan, and you choose the Standard Repayment Plan for your Special Direct Consolidation Loan, your remaining repayment term will continue to be 7 years.
What is the interest rate?
The interest rate on your Special Direct Consolidation Loan will be a fixed rate that is 0.25% less than the current rate on the loans you are consolidating, not to exceed 8.25%. The rate on your Special Direct Consolidation Loan will be fixed for the life of the loan, even if your current loans have a variable interest rate. You also qualify for an additional 0.25% interest rate reduction if you sign up for Direct Debit, our automatic payment service. If you consolidate multiple loans that have different interest rates, you will have different fixed interest rates on different parts of your Special Direct Consolidation Loan.
Will my payments be lower?

It depends on the repayment plan you choose.

You'll receive more detailed information about the available repayment plans when we (or another federal loan servicer) notify you that you are eligible for a Special Direct Consolidation Loan. If you decide to consolidate, we'll work with you to determine the repayment plan that best meets your needs.

What if I forgot to include all of the loans I want to consolidate on my application?

Complete the Federal Direct Consolidation Loan Request to Add Loans Form and mail, fax, or email the completed form to:

FedLoan Servicing
P.O. Box 69184
Harrisburg, PA 17106-9184

Fax: 717-720-1628
Email: SDCLHelp@MyFedLoan.org

Don't forget to complete and return pages 1 and 2. Also, please keep a copy for your records.

Add a Loan

Already applied for a Special Direct Consolidation and want to add a loan to your application? Complete the Federal Direct Consolidation Loan Request to Add Loans Form.

Don't forget to complete and return pages 1 and 2. Also, please keep a copy for your records.

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