Ideally, you would qualify for debt consolidation after graduation.However, you also could qualify when you leave school or are enrolled less than half-time.There are no application fees for a direct consolidation loan and no prepayment penalty.
The Direct Consolidation Loan program is the right choice if your goal is to simplify the process for repaying federal loans and keep your options open for the many repayment plans available for federal loans. If you’re using private lenders for student loan consolidation, there is a chance you could get a better interest rate and possibly lower monthly payments. That’s because federal loan rates are so low – fixed rates of 4.45% for undergraduates, 6% for graduates in 2017-2018 – that it’s difficult for private lenders to beat the rates and make a profit.
There also is a section detailing certifications, terms and conditions and borrower’s rights and responsibilities.
If you sign and date the application, it is a binding contract.
If you want to consolidate a loan that's in default, you have to either make satisfactory repayment arrangements with your lender or agree to repay it under one of the Department of Education's payment plans that tie payments to your income level. You'll need your Federal Student Aid personal identification number, or PIN, in addition to your personal information.
If you don't already have a PIN, request one online at