Loan Consolidation

Consolidation loans often make it easier for the borrower. Consolidation loans are available to a borrower that is in-grace or is repaying student loans. The loan limit amounts are determined by adding the balances of eligible education loans. The borrower is responsible for all interest and repayment of the loan. The maximum repayment period: up to 30 years. The interest rate is determined by the weighted average of the rates of all eligible loans rounded up to the nearest eighth of one percent, not to exceed 8.25%* fixed.

COSTEP will offer a .25% reduction for having your payment automatically withdrawn from your account.

Want a consolidation loan?

1. Click on the blue “Get A Loan” button above
2. Select the “Consolidate” tab, then the red “start now” button
3. Fill in your information
4. E-sign online!

Loan Consolidation Frequently Asked Questions

Q: Am I able to consolidate my student loan(s)?

Q: What loans are eligible to consolidate?
A: The following loans are eligible for consolidation in the Federal Consolidation Loan Program:

• Subsidized Federal Stafford Loan
• Unsubsidized Federal Stafford Loan
• Guaranteed Student Loan (GSL)
• Subsidized Federal Consolidation Loan
• Unsubsidized Federal Consolidation Loan
• Federal Direct Subsidized Stafford Loan
• Federal Direct Unsubsidized Stafford Loan
• Federal Supplemental Loan for Students (SLS)
• Federal Perkins Loan
• Health Professions Student Loan (HPSL)
• Health Education Assistance Loan (HEAL)
• Federal Insured Student Loan (FISL)
• Federal PLUS Loan

Q: Can I consolidate a CAL or HELP loan?
A: Borrowers may be able to consolidate a defaulted loan provided they have made Satisfactory Repayment Arrangements with the agency servicing the loan.

Q: Do I have to pay any fees to consolidate?
A: No. Borrowers do not have to pay an origination fee or any other charges when obtaining a Consolidation Loan.

Q: Can I consolidate a defaulted loan?
A: Borrowers may be able to consolidate a defaulted loan provided they have made satisfactory repayment arrangements (SRA) and have maintained those arrangements.

Q: Can I consolidate a loan that is with a collection agency?
A: Yes. As long as the loan is an eligible loan and meets satisfactory repayment arrangements (SRA).

Q: Can I consolidate private loans or credit cards?
A: No. Private institutional loans are not eligible for consolidation in the Federal Consolidation Loan Program.

Q: My account is currently past due. Can I consolidate?
A: Yes, we can offer past due borrowers a forbearance to consolidate in order to bring their account current and allow enough time to accomplish the consolidation. However, it is always better to keep your account current.

Q: What is the “single-holder rule?”
A: The “Single Holder Rule is a federal regulation that requires a borrower with all of his/her FFELP loans with one lender (and who wants to consolidate those loans) to consolidate with that lender, unless the lender does not offer consolidation loans or an income-sensitive repayment schedule. If a borrower has loans with more than one FFELP lender, he/she can consolidate with any lender that participates in the consolidation loan program.

Q: If I have already consolidated my student loans, can I reconsolidate to lock in a lower interest rate?
A: Borrowers can not reconsolidate an existing consolidation loan by itself. The borrower may consolidate again, but only in the following instances:

• If the borrower obtains a new eligible loan after the date of the original consolidation loan was made, or
• If the borrower has at least one other eligible loan that was not included in the original consolidation loan.

Q: How long does the consolidation process take?
A: Once COSTEP receives your completed application, it takes on average 4 to 6 weeks to process your consolidation. You will be notified in writing once the consolidation process has been completed. It is important that you continue to make your current student loan payments during the consolidation process. If these payments are not maintained, then you risk defaulting on your student loans which may disqualify you from consolidation.

Q: Can I consolidate a PLUS loan my parent took out for me with my Stafford Loans?
A: No. PLUS loans are taken out under the parent’s name and social security number while the Stafford loans are taken out under the student’s name and social security number. Therefore, each individual must consolidate separately.

Q: Can my spouse and I consolidate our student loans together under one loan?
A: Effective July 1, 2006, married couples with student loans are no longer allowed to consolidate their student loans together. However, loan consolidation may still be applicable on an individual bases if consolidation criteria is met.

Q: Is there a minimum balance required to consolidate?
A: Lenders are permitted to set minimum balance policies, but the amount varies from lender to lender. COSTEP does not require a minimum balance to consolidate.

Q: Can I prepay my consolidation loan at anytime without penalties?
A: Yes, borrowers may prepay their Consolidation loan at any time without penalty, just like any other FFELP loan.