Deferment and forbearance options

All deferment and forbearance options available to FFEL Stafford and PLUS borrowers are available to a
borrower who received a Consolidation Loan after July, 1993. Check your promissory note or our Web site
for deferment and forbearance options.
If you consolidate subsidized as well as unsubsidized Stafford Loans, you will still get the interest benefits
on the portion of the Consolidation loan that represents the original subsidized Stafford Loans.*
For instance, if you consolidate $4,000 in subsidized Stafford loans with $6,000 in unsubsidized Stafford loans, then 40% of your Consolidation Loan would be considered to be subsidized and would be eligible for the interest subsidy during periods of deferment. If you get a deferment later on, when the outstanding balance on your Consolidation Loan is $8,000, then interest will accrue on the $4,800 that represents the portion of the original unsubsidized loan.
As with Stafford Loans, you may pay the interest on a Consolidation loan as it accumulates during a period
of forbearance or unsubsidized deferment, or postpone paying the interest and have it capitalized (added
to the principal owed) when you resume repayment.
Cancellation options
It’s important to know that Consolidation Loans don’t have a cancellation/forgiveness provision for
teachers at low-income schools or for child-care providers. Therefore, you lose those options when you
consolidate your Stafford Loan. However, all of the other cancellation provisions that are available for a
Stafford Loan, are also available with a Consolidation Loan, including the cancellations for total and
permanent disability, unpaid school refund, forgery of aid documents, and attending a school that closed.
If some but not all of your consolidated loans are affected by consumer problems at your school, only the
portion of your Consolidation Loan that is made up of the affected loans will be cancelled.

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