Because there are no penalties for prepaying the loan in full or in part, borrowers may make larger monthly payments or extra payments if they wish.
Borrowers may also change repayment plans at least once a year.
Previously, the interest rate would have been capped at 8.25%.
To be eligible for Federal Loan Consolidation, borrowers must have at least one loan from the Federal Direct Loan program or Federal Family Education Loan (FFEL) program that is not in an “in-school” status.
Defaulted loans may be consolidated in certain circumstances.
The interest rate on a federal consolidation loan is a fixed rate equal to the weighted average of the interest rates on the federal education loans that are being consolidated, rounded up to the nearest one-eighth of one percent.
For example, suppose a borrower has a ,500 loan at 3.4% and a ,000 loan at 3.86%.