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| Glossary |
Stumped by an acronym? Wondering what "grace period" means? Check our glossary of frequently used financial aid terms and phrases.
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When you consolidate your loans, you obtain a new loan through which you combine your existing federal loans after you leave school or drop below half-time status.
The interest rate you pay on a consolidation loan is based on the weighted average of the loans you choose to consolidate.
- Beginning July 1, 2006, all new direct loans are at a fixed interest rate of 6.8% for Stafford Loans and 7.9% for PLUS Loans.
- Direct Loans disbursed prior to July 1, 2006 are at a variable interest rate that changes on July 1 each year.
If you are considering loan consolidation, you should contact Direct Loan Consolidations at 800-557-7392 or http://loanconsolidation.ed.gov for more information.
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