Consolidating defaulted federal student loans
The Department of Education web site has information about the fees the government charges when you take out a Stafford loan.There are limits on the amount of Stafford loans you can borrow.The Department of Education web site has information about the fees the government charges when you take out a PLUS loan.Unlike Stafford loans, PLUS borrowers are generally required to pass a credit check.Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.Direct consolidation loans are now the only type of federal student consolidation loan.Guaranty agencies pay off the lenders when borrowers default, and in turn, are reinsured by the Department of Education.The National Council of Higher Education Resources (NCHER) also has a fact sheet with a list of guaranty agencies.
There are even ways to cancel these loans in limited circumstances.Interest Rates for Newer Loans: PLUS loans come in two varieties: 1) Parent PLUS loans are for parents borrowing for the education of dependent undergraduate children enrolled in school at least half time and 2) “Grad PLUS” loans are available for graduate and professional students.For PLUS loans first disbursed on July 1, 2019 and before July 1, 2020, the interest rate is 7.08%.The Department posts information to help you determine whether you are a dependent or independent student.The Department has a fact sheet with information about the different types of loans and borrowing limits. The maximum interest rates, and many of the important terms of federal loans are set by Congress, and are similar in both the FFEL and Direct Loan programs.
Stafford loan limits vary depending on whether you are financially dependent or independent.