Frequently Asked Questions

1. What is a Federal Consolidation Loan?
   A Federal Consolidation is a FREE federal loan offered through the FFEL Program. The Federal Consolidation Loan is an added benefit of Federal Student Aid. The Federal Consolidation Loan is a combination of all of one’s student debt consolidated into one simple payment.
2. Why should people consolidate their federal student loans?
   People consolidate their federal student loans to reduce their monthly payment up to 60% and fix their interest rate at a historic all time low.
3. What are the advantages of consolidating your student loans?

   The advantage of consolidating your student loan are the following:

   • You can reduce your monthly payment up to 60%
   • FIXED Interest Rate: Historic All Time Lows
   • Reduce your interest rate an additional .6% with Mytuition.com Rewards
   • FREE Federal Program
   • Retain ALL Federal Benefits
   • Interest may be Tax Deductible
   • Simple Interest Loan
   • NO Prepayment Penalty
   • Everything you pay over your monthly payment is applied directly to principle
4. How do I know if I am eligible for a consolidation loan?
   

   You are eligible for a consolidation loan if you meet the following requirements:

   • You have over $10,000 in student loan debt
   • You have not previously consolidated your student loans
   • If you are not in default on any of your loans
5. Are there any fees/charges for consolidating my student loans?
   There are NO fees for consolidating your student loans. This is a FREE federal program.
6. Do I still receive the same federal benefits?
   Yes! Student loan consolidation is a federal program, therefore you are still entitled to benefits such as deferment, forbearance, and tax deductible interest. Student consolidation loans are also government guaranteed and federally insured.
   
   Also, if you decide to consolidate your Perkins Loan(s), you will lose the interest subsidy on this portion of your debt. Although, since the interest rate on your Perkins Loan is 5%, including your Perkins loan(s) into your consolidation loan may have a positive impact on the weighted average interest rate for your consolidation loan.
7. Is my new interest rate for my consolidation loan fixed or variable?
   The interest rate on your consolidation loan is fixed. This allows you to take advantage of the historically low interest rate and you may be able to reduce your interest rate an additional .6%.
8. How is my new interest rate calculated for my consolidation loan?
   The interest rate for your federal student loan is calculated by taking the weighted average of your variable interest rate and loan balances and rounding it up to the nearest 1/8 of 1% and fixing it at the new interest rate. This federal consolidation calculation is regulated by the U.S. Department of Education. Consolidating with Mytuition.com allows you to reduce your interest rate an additional .6%. Here’s an example below:
   • Step 1:
     

     Outstanding Balance	Interest Rate	Calculation
     $4,400	8%	$4,400 x .08 = $352
     $2,200	4%	$2,200 x .04 = $88
     $6,500	10%	$6,500 x .10 = $650
     $13,100 (Total Combined Balance)		(Results of Calculations) $1,090

   • Step 2:
     Divide the total combined balance of all loans by the sun of the calculations
     $1,090 / $13,100 = .083206 or 8.321%
     
   • Step 3:
     Round the results of step 2 to the nearest 1/8 of 1%
     8.321% is rounded to 8.375%
     
     Your Fixed Interest Rate:
     8.375% is your NEW weighted average interest rate for your consolidation loan.
     
     *At this time you have the opportunity to lower your fixed interest rate up to an additional .6% if you choose to participate in the MyTuition.com rewards program
     
9. Do I have to pay prepayment penalties?
   There is NO prepayment penalty. Every penny you pay over your monthly payment is applied directly towards the principal of the loan.
10. Am I able to refinance a consolidation loan?
    The U.S. Department of Education does not allow a borrower to refinance a consolidation loan without making any additions to the original loan. If you have additional federal loans that were not included in the original consolidation loan, then you can add those loans and recalculate the loan into a new Federal Consolidation loan.
11. Can I include my private loans into my Federal Consolidation loan?
    Non-Federal student loans can count towards your cumulative loan balance, which enables you to extend the repayment term. Private loans are not eligible for the FFELP Consolidation loan.
12. Is there a credit check?
    No, there is no credit check because this is a FREE Federal Program.