Notice: Undefined index: articledetail in /home/utils/securefiles/securecode/utl_article.cls.php on line 643
Are You Consolidating Within Grace Period? Make Note of a Loophole | EdFed.com
College Loan Consolidation, Federal Loan Consolidation, Private Loan Consolidation, Student Loan Consolidation

America's Top Student Loan Provider




Are You Consolidating Within Grace Period? Make Note of a Loophole
By Nihit Aurora
 
Federal loans offer a great way for parents and students alike to pay for educational expenses. The following loans can be utilized for educational purposes and are eligible for student loan consolidation.
  • Federal Stafford Loan
  • Federal Direct Loan
  • Federal Perkins Loan
  • Health Professions Student Loan
  • Nursing Student Loan (NSL)
  • Federally Insured Student Loan (FISL)
  • Auxiliary Loan to Assist Students (ALAS)
  • Federal Supplemental Loan for Students (SLS)
  • National Direct Student Loan (NDSL)
  • Health Education Assistance Loan (HEAL)
  • Federal Parent Loans for Undergraduate Students (PLUS)
  • Loan for Disadvantaged Students (LDS)
There is a grace period available on certain loans if a student wishes to begin repayment. For example, the grace period available for beginning repayments on a Stafford Loan is six months and that for a Perkins Loan nine months. The grace period for an FISL loan is 12 months. 'PLUS' loans do not carry a grace period for repayment.

However, there is no grace period available for Federal Consolidation Loans. In this case, the repayment begins immediately after the consolidation loan is disbursed. The first payment is due no later than 60 days after the funding.

Students who elect to consolidate within the grace period lose the remainder of the grace period. However, there is a loophole known as the delayed disbursement loophole that can be used if the lender agrees to cooperate with the buyer. In instances where the lender delays the disbursement of the consolidation loan right until the end of the grace period the student benefits by retaining most of the grace period.

Furthermore, the U.S. Department of Education has published relevant guidance for borrowers with variable rate loans. These guidelines indicate that lenders can provide the borrower with suitable interest rates. Either this can be done upon the receipt of a significantly complete application for consolidation of the loan or at the time the lender disburses the loan.

Borrowers can effectively lock in a low rate of interest while still being able to hold onto the grace period. However, the department's guidelines rest on the original ambiguity that is present in the Higher Education Act. This ambiguity revolves around the interest rates on consolidation loans, whereby it is not certain if these interest rates are based on the actual rates in effect when the loan application is made or when the consolidation loan is funded.

On the Net

Grace Period Loan Consolidation
www.onesimpleloan.com/grace_period.asp

Federal Student Loan Consolidation
www.federalconsolidation.org/repaymentfaq.htm




 


Article Title : Are You Consolidating Within Grace Period? Make Note of a Loophole
Comment not found for this article.
 
Comment

Related articles
• Need Fast And Easy Private Student Loans For Bad Credit
• How to Save Thousands on Student Loans Using a Loophole in the Federal Consolidation Program

Share this story:
  • BlinkList
  • blogmarks
  • del.icio.us
  • Digg
  • Facebook
  • Google
  • Sphinn
  • MySpace
  • NewsVine
  • Simpy
  • StumbleUpon
  • Technorati
  • E-mail this story to a friend!
  • Print this article!
  • Faves
  • Furl
  • Netvouz
  • Slashdot
  • Spurl
  • Yahoo! Buzz
 



EdFed introduces… Awareness… Learnal
At, EdFed, we proudly introduce 'articles on student loans' and 'Learnal - the journal to learn from', our free newsletter on student loan management, which is sure to keep you informed of the latest events and happenings in the student loan market. To receive your copy of the above just use the RSS feed below and add this to your "My Yahoo", blogs, newstickers, and other similar channels accepting distributable content.
Click here to sign up for our Weekly Newswire now!

How EdFed Helped others!
I contacted several lenders while I was looking for a company to consolidate my federal loans. I heard all of the sales pitches. What it really boils down to, through, was who could save me the most money. Edfed is the only lender who would guarantee my borrower benefits. All of the other lenders had provisions allowing them to take my 1%interest reduction away even after I earned it. On my consolidation, the 1% reduction will save me almost $18,000, with EdFed, I know I will get the savings. EdFed beats the competition hands down.
- John F.  Albany, NY
* Your Name: * Your E-mail Address:

We respect your privacy.
* Your Friend's name: * Your Friend's E-mail address:
Include a Message:
+ Privacy Policy

Student Loan Consolidation Info - How to Choose the Right Loan Company

This column is sponsored by Granted, America's top job search engine. The Career Resources column is presented by Granted, America's leading job search engine dedicated to getting people jobs.

Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.

read more
CONSOLIDATION NEWS
Schools Will No Longer Receive Paper FAFSA Forms
(September 20, 2007)

news desk
CALCULATORS
Stafford Loan Payment Calculator
PLUS Loan Payment Calculator
Loan Consolidation Payment Calculator
Articles
Calculators
FAQs
Glossary of Terms
Loan Comparison Chart
Scholarship Search
The federal student loan consolidation program is intended to help students better manage their loans. Because getting higher education is expensive and millions of students rely on student loans to finance their education, federal loan consolidation provides a break for graduates with debt.
US School Directory
Comprehensive List of Schools at which EdFed Assists Students.
EdFed is a FFELP lender with lender identification number 834241.
© Copyright 2020 EdFed. All Rights Reserved.

Home · About Us · Contact Us · News · Sitemap
Career Advice · Tell a Friend · Privacy Policy · Resume Service
Resume Distribution Service · Post Resume · Job Search Course
EDFED NEWSLETTERS
Sign up for the latest news on student loans.
Email Address:
+ Most Recent Newsletter
+ Newsletter Archives