Special Direct Consolidation Loans

[road2freedom]

I believe my wife, who is a teacher, qualifies for this program based on what I've read. But when you go to the loanconsolidation.ed.gov site it tells you that you must wait for the lender to contact you, which should start in January. I've given it about 4 months now and she has not heard anything. Does she need to call them to get the ball rolling? It would be nice to get her loans consolidated, rate lowered, and maybe even forgiven eventually.

 

All of the other programs geared towards forgiveness for teachers back when she was in school dried up before she could meet the qualifications.

[johnny5]

You might need to talk with you loan servicer.

 

Mine is SallieMae, the "Letter" was actually a document that they posted in the correspondence section of the website. (I think if you don't have E-Delivery of statements you would still get a physical letter.) Which took me a little bit to find, because on my log in there is two tabs at the top one is "Sallie Mae Loans (Federal and Private)" the other is "Department of Education Federal Loan"s, each tab has its own correspondence page.

 

I've copied the text of the letter below, nothing special just tells you to go apply at StudentLoans.Gov

 

I'm not sure who, where, when your loans get coded as being eligible and exactly what factors are involved but for me 2 out of 8 where eligible, this was displayed to me during the app process. I would suggest you start with the loan servicer because this could be some form of staggered roll out or something that you wouldn't appear eligible now but next month you'd get the letter and will be, but thats just speculation.

 

You're among the select group of borrowers identified by the Department of Education for a Special Direct

 

Consolidation Loan. To learn more about this opportunity, please go to StudentAid.ed.gov and click on the Special

 

Direct Consolidation Loan link to determine if it's right for you.

 

How this new program potentially impacts you:

 

• On each of your commercially‐held Federal Family Education Loan(s), a 0.25% interest rate reduction will

 

be received off of your existing interest rates.

 

• Enroll in automatic debit and earn a 0.25% interest rate reduction.

 

• Same loan terms and conditions apply.

 

• Your eligible federal loans will be serviced by one loan servicer.

 

• If you're currently in your grace period, you'll lose the remainder of your grace period.

 

If you believe this Special Direct Consolidation Loan is in your best interest, here's how to apply:

 

• Visit StudentLoans.gov and log in using your Federal Student Aid PIN. If you're a new user, or forgot your

 

PIN, click the PIN link on the StudentLoans.gov site.

 

• Apply for the Special Direct Consolidation Loan and select a repayment plan.

 

• If you're currently enrolled in automatic debit with your commercial lender, you'll need to re‐enroll these

 

loans after the Special Direct Consolidation Loan is set up.

 

If you decide not to consolidate your loans, but still need relief in managing your payments, here are some helpful tips:

 

• If you have a short term need for payment relief due to temporary financial hardship, contact your

 

servicer about deferment or forbearance options that might be available to you.

 

• Inquire with your servicer about eligibility for Income‐Based Repayment. This repayment plan may reduce

 

your payment amount based upon your disposable income.

 

• Enroll in auto debit with your current servicers and take advantage of any lower interest rate benefit They

 

may offer.

 

• Contact your servicer to learn about other repayment plan options available to you that could lower your

 

current monthly payment amount.

 

• Contact your servicer to inquire about other repayment relief that may be available to you.

 

If you have any questions, please visit StudentAid.ed.gov and click on the Special Direct Consolidation Loan link for

 

more information.

 

 

[johnny5]

Also I mentioned in another thread tonight but its worth here too, if her loans are all or mostly federal type loans she might qualify for the regular department of education consolidation. I recently did this for my self and a friend the process is pretty simple, but its probably only most effective with all federal loans that qualify which is more than what the qualify under "special consolidation". (I had all of mine qualify under the regular Doe consolidation, where only 2 would of qualified under special)

 

They have several different repayment plans, specifically 2 income based ones IBR and ICR. If you do these plans after 25 years the remainder of the loan is forgiven, as long as you where on the plan the whole time, paid as agreed, etc. This does shorten to 10 years for certain "public service" I would guess teachers qualify but I'm not fully versed.

[road2freedom]

Also I mentioned in another thread tonight but its worth here too, if her loans are all or mostly federal type loans she might qualify for the regular department of education consolidation. I recently did this for my self and a friend the process is pretty simple, but its probably only most effective with all federal loans that qualify which is more than what the qualify under "special consolidation". (I had all of mine qualify under the regular Doe consolidation, where only 2 would of qualified under special)

 

They have several different repayment plans, specifically 2 income based ones IBR and ICR. If you do these plans after 25 years the remainder of the loan is forgiven, as long as you where on the plan the whole time, paid as agreed, etc. This does shorten to 10 years for certain "public service" I would guess teachers qualify but I'm not fully versed.

 

Thanks for the replies. I'll have her call Nelnet and check online.

 

So it sounds like even though it's a consolidation, there's no opportunity for a rate decrease. I'll have to see what the specifics are if she gets a letter, but that doesn't sound promising.

 

The last time I played around with the DOE calculator it seemed like it wanted to combine our student loans in the calc. I wonder how that works. For me personally, I'm looking into the regular consolidation method but trying to decide if the rate increase on the subsidized portion is worth the decrease on the unsubsidized portion. I guess I have a lot more reading to do in this part of the forum.