Consolidation Loans (Direct or FFEL)

Consolidation loans allow student or

parent borrowers to combine multiple federal education

loans into one loan with one monthly payment.

These loans are made through one of two U.S. Department of

Education programs:

William D. Ford Federal Direct Loan

(Direct Loan) Program

Loans made through this program are referred to as Direct

Loans. Eligible students and parents borrow directly from the

U.S. Department of Education at participating schools. Direct

Loans include subsidized and unsubsidized Direct Stafford Loans

(also known as Direct Subsidized Loans and Direct Unsubsidized

Loans), Direct PLUS Loans, and Direct Consolidation Loans. You

repay these loans directly to us.

Federal Family Education Loan (FFEL) Program

Loans made through this program are referred to as FFEL Loans.

Private lenders provide funds that are guaranteed by the federal

government. FFEL Loans include subsidized and unsubsidized

FFEL Stafford Loans, FFEL PLUS Loans and FFEL Consolidation

Loans. These loans will be repaid to the bank or private lender that gave the loan.

Whether you (or your parents) receive a Stafford or PLUS Loan

depends on which program the school you attend participates

in. Most schools participate in one or the other, although some

schools participate in both. To locate participating in these programs use the College Matching Wizard.

What’s the interest rate on these loans?

For loans first disbursed on or after July 1, 2008, the interest

is 6.0 percent for subsidized* Stafford loans for undergraduate

students and 6.8 percent for unsubsidized* Stafford loans for

undergraduate and graduate students.

FFEL PLUS Loans first disbursed on or after July 1, 2006 have a fixed

interest rate of 8.5 percent. Direct PLUS Loans first disbursed on or

after July 1, 2006 have a fixed interest rate of 7.9 percent.

Use the College Matching Wizard for participating programs.