I have an FFEL loan serviced by Navient. I am not eligible for suspended payments or interest because the loan is not held by the federal government, but by Navient. If I consolidated into a direct loan, would I then be eligible for this program? I am not interested in suspending payments, but suspending the interest would go a long way toward paying down the principle.
May 3, 2014
And I think your plan should work. Here is what the Department of Education says on a Q and A page that they have:
“If I consolidate into a Direct Consolidation Loan during the suspension of payments, will my new consolidation loan automatically be placed in administrative forbearance?
Yes. However, consolidation can sometimes result in a higher interest rate because the interest rate on a consolidation loan is the weighted average of the loans you consolidated, rounded up to the nearest one-eighth of one percentage point. Therefore, you may find that your rate is higher than what you paid previously once the 0% interest rate period ends.
In addition, when you consolidate, any outstanding interest will capitalize, meaning that any outstanding interest will be added to your principal balance. If you consolidate, you will also lose credit for any qualifying income-driven repayment or Public Service Loan Forgiveness payments you may have previously made. Your servicer can provide you with information about how your loan balance, interest rate, and total amount to be paid would change if you consolidated into a Direct Consolidation Loan.”
Thank you! That was very helpful information!