Consolidating student loans faq
Except for PLUS loans, there are no credit checks required as long as other eligibility conditions are met.
Guaranty agencies are state or private nonprofit agencies that administer the federal guaranteed loan program.
Many of the terms and conditions for the FFEL and Direct loan programs are the same.
However there are some differences in repayment options.
However, you may not have to pay taxes if for example, you can show that you are insolvent.
It is a good idea to consult a tax professional for more information. Once you are delinquent for a certain period of time (usually nine months for federal loans), your lender will declare the loan to be in default.
The entire loan balance will become due at that time. The government can also seize tax refunds, garnish wages without a court order, take a portion of Social Security payments, and charge very large collection fees. You can postpone repayment through deferment or forbearance — or with a private loan, through any other way you can negotiate with your lender.
Parent PLUS loans may be discharged if the student for whom the parent received the loan dies.
Also, the death of both parents with a PLUS loan (assuming both took out the loan) is grounds for the “death discharge.” The death of only one of the two obligated parents does not cancel a PLUS loan.
However, it is very dangerous to consolidate federal loans into a private consolidation loan.