The Higher Education Reconciliation Act of 2005 eliminated the provision that allowed a FFEL or Direct Loan borrower who is enrolled in school on at least a half-time basis to request to enter repayment early on his or her Stafford Loans if the lender approves.

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Most lenders provide borrowers with the ability to apply on-line or request an application over the telephone.

Once an application is completed and submitted, the lender will request information from the borrower’s other lenders or from its own system to determine the amounts outstanding on the borrowers loans.

The borrower will then receive notification about the consolidation loan, normal consumer disclosures, the amount owed, and if appropriate, where to make payments.

FFEL Consolidation Loan Weighted Average Interest Rate (Federal student loan consolidation) Consolidation loans have fixed interest rates that are based on the weighted average of the interest rates on the loans being consolidated.

A lender can provide a new consolidation loan borrower with the lowest statutory weighted average interest rate for loans by using the lower of the weighted average of the interest rates on the loans being consolidated as of July 1 or the date the lender received the borrower's consolidation loan application.

The lender should apply a consistent method of determining when an application is received.Most federal education loans are eligible for consolidation, including subsidized and unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins Loans, Federal Nursing Loans, and Health Education Assistance Loans.PLUS Loan borrowers (parent and graduate/professional degree students) can also consolidate their loans.Private education loans are not eligible for consolidation.To obtain a complete list of the federal student loans that can be consolidated All FFEL and Direct Stafford Loan borrowers are eligible to consolidate after they graduate, leave school, or drop below half-time enrollment.PLUS loans are eligible for consolidation once they are fully disbursed.