In the United States both the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDLP) include consolidation loans that allow students to consolidate Stafford Loans, PLUS Loans, and Federal Perkins Loans into one single debt. This results in reduced monthly repayments and a longer term for the loan. Unlike the other loans, consolidation loans have a fixed interest rate for the life of the loan.^[1][2][3] The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents. ... The William D. Ford Federal Direct Loan Program is a United States Department of Education program that markets, originates, and disburses loans for higher education (including Stafford, Perkins, and PLUS loans). ... A Stafford loan is a loan product offered to students enrolled in American institutions of higher education to help finance their education. ... PLUS (Parent Loan for Undergraduate Students) Loans are loans offered to parents of students enrolled full-time at American institutions of higher education. ... A Federal Perkins Loan, or Perkins Loan, is a need-based student loan offered by the U.S. Department of Education to assist American college students in funding their post-secondary education. ...

Consolidation loans have longer terms than other loans. Debtors can choose terms of 10–30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans. The fixed interest rate is calculated as the the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%. Some features of the original consolidated loans, such as postgraduation grace periods and special forgiveness circumstances, are not carried over into the consolidation loan, and consolidation loans are not universally suitable for all debtors.^[3][2] In statistics, given a set of data, X = { x1, x2, ..., xn} and corresponding weights, W = { w1, w2, ..., wn} the weighted mean is calculated as Note that if all the weights are equal, the weighted mean is the same as the arithmetic mean. ...

The Federal Loan Consolidation Program was created in 1986. In 1998, the United States Congress changed the interest rate to the aforementioned fixed rate weighted mean, effective February 1, 1999. Consolidation loans taken out before that date had a variable interest rate, determined by the individual FDLP loan origination center (e.g., in the case of Harvard University the university) or FFELP lender (e.g., a third party bank).^[3][4] Type Bicameralism Houses Senate House of Representatives United States Senate Majority Leader Harry Reid, D, since January 4, 2007 Speaker of the House Nancy Pelosi, D, since January 4, 2007 Members 535 plus 4 Delegates and 1 Resident Commissioner Political groups (as of November 7, 2006 elections) Democratic Party Republican... Harvard University (incorporated as The President and Fellows of Harvard College) , is a private university in Cambridge, Massachusetts, USA. One of the eight Ivies, it was founded in 1636. ...

In 2005, the Government Accountability Office considered consolidating consolidation loans so that they were exclusively managed through the FDLP. Based on several assumptions about future variations in interest rates, the loan volume, the percentage of defaulters, cost estimates from the United States Department of Education, it concluded that while doing so would incur an additional cost of $46 million, caused by the higher administrative costs of the FDLP compared to the FFELP, this would be offset by a $3,100 million saving comprised in part of avoiding $2,500 million in subsidy costs.^[1] GAO headquarters The Government Accountability Office (GAO) is the non-partisan audit, evaluation, and investigative arm of Congress, and an agency in the Legislative Branch of the United States Government. ...

References

1. ^ ^{a b} GAO-06-195 Highlights, STUDENT CONSOLIDATION LOANS: Potential Effects of Making Fiscal Year 2006 Consolidation Loans Exclusively through the Direct Loan Program (PDF). U.S. Government Accountability Office (2005-12-01).
2. ^ ^{a b} Frequently Asked Questions About Consolidation Loans. Washington State University Office of Student Financial Aid (2006-06-09).
3. ^ ^{a b c} Potier, Beth. "Amid the hype, opportunity lurks for students with loans.", Harvard Gazette, 2004-02-05.
4. ^ Types of Student Aid: Consolidation Loans. Student Guide 2001–2002. United States Department of Education.

GAO headquarters The Government Accountability Office (GAO) is the non-partisan audit, evaluation, and investigative arm of Congress, and an agency in the Legislative Branch of the United States Government. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... December 1 is the 335th (in leap years the 336th) day of the year in the Gregorian calendar. ... Washington State University (WSU) is a major public research university in Pullman, Washington. ... For the Manfred Mann album, see 2006 (album). ... June 9 is the 160th day of the year in the Gregorian calendar (161st in leap years), with 205 days remaining. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ... February 5 is the 36th day of the year in the Gregorian Calendar. ... ED headquarters in Washington A construction project to repair and update the building facade at the Department of Education Headquarters building in 2002 resulted in the installation of structures at all of the entrances to protect employees and visitors from falling debris. ...

Further reading

• Teresa Boldt (2005-06-03). "FFELP Consolidation for Students Enrolled or In-Grace: A How-To Guide for Financial Aid Administrators" (PDF). National Student Loan Program.
• Burd, Stephen. "House Committee Approves Bill to Extend Higher Education Act."", Chronicle of Higher Education, 2005-08-05.
• Federal Loan Consolidation. Pepperdine University School of Law (2006).
• Federal Loan Consolidation. Northwestern University Office of Undergraduate Financial Aid (2006).

2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... June 3 is the 154th day of the year in the Gregorian calendar (155th in leap years), with 211 days remaining. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ... August 5 is the 217th day of the year in the Gregorian Calendar (218th in leap years), with 148 days remaining. ... Pepperdine University is a private institution of higher learning affiliated with the Church of Christ. ... Northwestern University is a prestigious private, coeducational, non-sectarian research university, located in Evanston and Chicago, Illinois. ...

External links

• Fact sheet from the Federal Student Aid site
• Student Loan Consolidation Information