student loan consolidation

Good news for parents— though PLUS loan rates did increase in 2006 to 8.5%, the Higher Education Reconciliation Act left one loophole that allows a .25% interest rate reduction just for consolidating. The loophole works by taking advantage of the 8.25% rate cap on consolidated student loans. Since this cap is less than the 8.5% interest rate of the PLUS loan, a consolidated PLUS loan automatically assumes the lower rate.

When to consolidate PLUS loans
Parents can consolidate student loans immediately after the funds are disbursed. Graduate students who take out PLUS loans under the new guidelines will need to wait until after graduation to refinance student loans. Even if you don’t want to extend the repayment period in order to reduce payments, there’s no reason why you shouldn’t consolidate in order to lower the interest rate to 8.25%. When you consolidate student loans with ScholarPoint, you’ll also earn an additional incentive that can reduce your interest rate by another .25%.

What are the repayment terms on a consolidated PLUS loan?
The repayment period of a PLUS loan begins 60 days after the funds are disbursed and the standard repayment period is 10 years. One of the many benefits of consolidating student loans is the ability to extend the repayment period from the standard 10 years up to a full 30 years. However, if your plan is to repay the loan faster, make sure to verify with the loan consolidation company there are no penalties for early repayment. At ScholarPoint, we never charge fees if you choose to pay off your balance early.

How to Consolidate PLUS Loans
There is no collateral and no credit check required in order to apply for an FFEL consolidated PLUS loan. ScholarPoint’s process is simple, free and can be completed entirely online. Apply now and see how much you’ll save with ScholarPoint!