Loan Consolidation – Frequently Asked Questions |
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Am I Eligible?
Can I consolidate with VSAC, even if I have no eligible VSAC loans?
What if I only have one eligible VSAC loan?
What if the one eligible loan is a Consolidation loan?
Can I apply for consolidation while my loans are in their grace period?
Can I consolidate my loans while I am attending school?
Can my spouse and I consolidate our loans into a single loan?
What is the maximum/minimum loan amount for a Consolidation loan?
What if I don't know all of my loan information?
How Does Consolidation Work?
How much will it cost to consolidate?
Should I consolidate my Perkins loan?
I need to send my application to VSAC – what is VSAC's mailing address?
How long will it take for my application to be processed?
Should I keep making payments on my existing loans?
When will I have to make my first payment on my new loan?
What will my new payment amount be?
Will I have to make payments while I am in school?
What will my new interest rate be?
What Should I Expect After Consolidation?
What if I forget to consolidate one of my student loans?
If I have already consolidated, can I reconsolidate to get a lower interest rate?
Will my future Stafford and/or PLUS loans have the same rate as my Consolidation loan?
If I consolidated a PLUS loan, can I discharge the loan if my son/daughter passes away?
Will new Stafford loans, that I borrow in the future, have a grace period?
Q: Can I consolidate with VSAC, even if I have no eligible VSAC loans?
A: VSAC’s mission is to serve Vermonters and Vermont schools. To be eligible for a VSAC consolidation loan you must be a Vermonter or an existing VSAC borrower.
Q: What if I only have one eligible federal student loan?
A: You can consolidate one loan and lock in a fixed interest rate.
Q: What if the one eligible loan is a Consolidation loan?
A: A single Consolidation loan cannot be reconsolidated.
Q: Can I apply for consolidation while my loans are in their grace period?
A: Yes, you may apply to consolidate your Stafford loans during your grace period. When you apply, simply answer QUESTION 20 by providing the month and year that your grace period will end. VSAC will delay processing of your consolidation loan until the end of your six-month grace period, allowing you to take full advantage of your six-month grace period.
Q: Can I consolidate my loans while I am attending school?
A: Maybe, but only if your loans are in a repayment status or in school deferment – this means you would have already used your 6 month grace period and have returned to school at least half-time.
Q: Can my spouse and I consolidate our loans into a single loan?
A: No, you may only consolidate your own loans.
Q: What is the maximum/minimum loan amount for a Consolidation loan?
A: There is no maximum or minimum loan amount to consolidate with VSAC.
Q: What if I don't know all of my loan information?
A: To locate information on all of your student loans, visit the National Student Loan Data System (NSLDS) website at www.nslds.ed.gov. You will need a Personal Identification Number (PIN) from the U.S. Department of Education to access your loan information. If you do not have a PIN, you may request one online at www.pin.ed.gov. If you apply online through myVSAC, your VSAC loan information will be pre-filled for you.
Q: How much will it cost to consolidate?
A: There is no application or processing fee and there is no prepayment penalty.
Q: Should I consolidate my Perkins loan?
A: Here's some information that can help you make that decision: Perkins loans have a 5% fixed interest rate that may increase the weighted average interest rate of your Consolidation loan. Perkins loans have a nine-month grace period and are subsidized, meaning they are interest-free during periods of enrollment, grace, or deferment. Unlike subsidized Stafford loans, when Perkins loans are consolidated, they become unsubsidized. Once consolidated, any loan forgiveness benefit is also forfeited. For more information, consult your Perkins loan servicer.
Q: I need to send my application to VSAC – what is VSAC's mailing address?
A: Mail your completed, signed application, as well as all supporting forms, to:
We must receive your original signature on the application – NO FAXES OR PHOTOCOPIES!
Q: How long will it take for my application to be processed?
A: Depending on the number and type of loans you currently have and whether we receive all required information, it can take 4-8 weeks for Consolidation applications to be processed.
- During exceptionally busy periods, such as June, July, and August, processing time may exceed eight weeks.
- If you are consolidating loans held by another lender, it may take additional time to process your application.
- If your Stafford loans are in a six month grace period and you requested that we delay processing of your application, we will complete your consolidation once your grace period ends. In the meantime, you may receive a Stafford Loan Repayment Disclosure. We will contact you in writing if additional information or documentation is needed to complete your application. Until you receive a Consolidation Repayment Disclosure statement confirming that we have completed your loan consolidation, please continue making all required payments.
Q: Should I keep making payments on my existing loans?
A: Yes, if your loans are currently in an active repayment status, continue to make all regular payments. You will be notified by mail with a repayment disclosure statement when your Consolidation loan has been completed.
Q: When will I have to make my first payment on my new loan?
A: The first payment is usually due 30-45 days after the consolidation has been completed. You will receive a repayment disclosure statement and a repayment schedule which will identify your payment due date; this will be followed by monthly statements.
Q: What will my new payment amount be?
A: To estimate what your payments and total amount of interest paid will be, use our Loan Calculator. After your application has been processed, the disclosure and monthly statement will include your exact payment amount and interest rate.
Q: Will I have to make payments while I am in school?
A: No, as long as you are enrolled at least half time at an eligible school your loans will be deferred until you drop to less than half-time enrollment or graduate.
Q: What will my new interest rate be?
A: Your interest rate will be a fixed rate, no higher then 8.25%.
- Your rate is determined by calculating a weighted average of your current interest rates. The resulting rate is rounded up to the nearest 1/8th percent. Click here to estimate your weighted average interest rate by entering your current loan balance(s) and current interest rate(s). Click here if you need help determining your current loan balance(s) or interest rate(s).
Q: What if I forget to consolidate one of my student loans?
A: You can add an eligible student loan into your new Consolidation loan if the loan is added within 180 days of the original date of your new Consolidation loan. If 180 days have passed, you may reapply to consolidate all of your loans.
Q: If I have already consolidated, can I reconsolidate to get a lower interest rate?
A: Once you have consolidated your student loans, you can reconsolidate only if you have eligible federal education debt to add into the original consolidation or you borrow a new eligible student loan after the date of the original consolidation.
Q: Will my future Stafford and/or PLUS loans have the same rate as my Consolidation loan?
A: The interest rate on any future Stafford and PLUS loan is determined by the federal government. Based on current law, the interest rates on these loans would not be the same as that on your new Consolidation loan.
Q: If I consolidated a PLUS loan, can I discharge the loan if my son/daughter passes away?
A: If you consolidate a PLUS loan, the portion of the Consolidation loan which is attributable to the PLUS loan for the deceased dependent may be discharged.
Q: Will new Stafford loans that I borrow in the future have a grace period?
A: Yes. Any new Stafford loan will still be entitled to a six-month grace period.
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