Managing Your Debt
Loan Consolidation

What is Loan Consolidation?

If you are making payments on loans from one lender or multiple lenders or from different loan programs, you can consolidate all your loans into one loan. This will make your life easier since you will only have one payment to make, and it might make it possible to spread your payment over a longer period of time.

However, stretching out the payments means you may pay more interest over the life of the loan.

1. To qualify for a Federal Consolidation Loan guaranteed by the Oregon Student Assistance Commission (OSAC), the borrower must include at least one OSAC-guaranteed loan in the Federal Consolidation Loan.
   
   
2. The interest rate for Federal Consolidation Loans is set by law and is equal to the weighted average of the loans being consolidated, rounded up to the nearest 1/8 of one percent, and is capped at 8.25 percent. The rate is fixed, except for portions attributable to HEAL. View current interest rates from this link.
   
   
3. In order for a loan in default to qualify for a Federal Consolidation Loan, the borrower must have made satisfactory repayment arrangements with the holder of the defaulted loan.
   
   
4. OSAC will not guarantee a spousal consolidation loan. If married borrowers jointly consolidate their student loans, both spouses must qualify for any deferment and/or forbearance options. Each spouse is individually liable for the entire Federal Consolidation Loan, regardless of future changes in marital status, or in the event of the death of one spouse. OSAC recommends that married couples considering joint consolidation of their student loans carefully consider their options and consult with their lender before doing so.
   
   
5. Borrowers may consolidate loans under the Federal Family Education Loan Program (FFELP) and/or Federal Direct Loan Program (FDLP) in the same Federal Consolidation Loan. An OSAC lender can assist you if you have either or both types of loans.
   
   
6. Consolidation loans may offer fewer deferment options, and you will lose any forgiveness eligibility you may have on your Perkins, NDSL, and Nursing Loans.
   
   
7. The following types of loans can be included in a Federal Consolidation Loan:

• Federal Stafford Loans, both subsidized and unsubsidized
• Federal Direct Loan Program (FDLP)
• National Direct Student Loans (NDSLs)
• Federal Perkins Loans
• Federal Insured Student Loans (FISLs)
• Parent PLUS Loans
• Auxiliary Loans to Assist Students (ALAS)
• PLUS Loans to students; SLS Loans
• Health Professions Student Loans
• Health Education Assistance Loans (HEAL)
• Nursing Student Loan Program loans

Note: Some lenders will not consolidate HEAL or Health Professions loans. PLUS Loans to students and ALAS are former names of the SLS Program.