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CHAPTER EIGHT
COMBINING STUDENT LOANS
The number of lenders‚ servicers and secondary markets
a borrower can be involved with at any one time can be overwhelming.
Combining loans can be a helpful tool in simplifying the process.
This process enables the borrower to reduce the number of
parties he/she must deal with by selling his/her student loans
from one lender/secondary market to another or simply switching
servicers so that all student loans can be serviced in one
place. This is called "combining" loans and should not be
confused with "consolidating."
Combining loans does not effect interest rate‚ deferment
provisions or repayment status of the original loan. The borrower
is simply choosing to reduce the number of agencies that need
to be dealt with. Be aware that not all lenders are willing
to buy or sell loans.
HOW TO COMBINE LOANS:
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Identify a servicer/secondary market you prefer to
deal with. (Refer to those you are currently doing business
with). You must have at least one original loan with
the one you choose.
-
Contact that agency and indicate you wish to "combine"
your loans. Are they willing to purchase the others?
Only Federal Stafford loans can be combined. Private
loans such as ALP and DEAL can be combined only if they
are from the same lender.
-
Federal Perkins‚ Primary Care Loans‚ Health
Professions Student Loans and Loans for Disadvantaged
students cannot be sold or purchased.
-
Your selected agency will send you the appropriate
paperwork to achieve your goal.
NOTE: Remember you must be current on all loans before you
combine. In other words‚ you cannot be in delinquent
or default status on any loan you wish to combine. Once this
has been rectified (if needed) you can pursue combining again.
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