Below is important information from the United States Department of Education concerning the consolidation of Student Loans. Please pass this information on to your classmates and friends before the January 31, 1999 deadline!

What does it mean to "consolidate" my student loans?

Through loan consolidation, you can combine some or all of your outstanding student loans into one consolidated loan. Loan consolidation may extend your repayment period, eliminate the hassle of dealing with multiple lenders, allow you to repay your loan as a share of your income, and - in many cases - give you a break on interest costs. Loan consolidations are available from the Department of Education's Direct Loan program, as well as private lenders participating in the Department's government-guaranteed (FFEL) loan program.

Why should I apply now?

If you apply for a consolidation loan from the Direct Loan program before January 31, 1999, you will receive a lower interest rate for the life of your loan. This rate is much lower than the rate on most existing Direct and FFEL loans, as well as the maximum allowable rate on FFEL consolidation loans (although FFEL lenders may charge a lower rate if they choose), Under this lower interest rate, most students save about $50 per $1,000 of debt over the life of their loans.

What is the lower interest rate that is available now?

If you apply now, your loan will have an interest rate of 7.46 percent this year. Although the interest rate is recomputed annually, it will be based upon a lower interest rate formula for. the life of your loan.

Under a law just passed by Congress, this low rate is only available if you apply before January 31, 1999. If you apply on or after February 1. 1999, the interest rate on your direct cousolidation loan will be calculated the same way the maximum allowable rate on FFEL consolidation loans is calculated today: based upon a weighted average of the interest rates of your original loans. This post-January rate will be less favorable for most students compared to the rate available between now and the end of January.

Where can I get a direct consolidation loan?

To apply for a loan consolidation through the Direct Loan program, please call the Direct Loan Direct Loan origination center at 1-800-557-7392 and ask for an application to be mailed to you or download an application from "www.ed.gov/DirectLoan". If you have a FFEL loan, your lender may provide the same low rate.

What if I'm still in school?

If you are in school, you may be able to consolidate your direct loans. Unfortunately, under the new law, you cannot obtain a direct consolidation loan before February 1999 if you are enrolled or accepted for enrollment in school and you have an outstanding FFEL or Perkins student loan.

What else do I need to know?

You must include at least one direct or FFEL loan in your consolidation loan.

You do not have to include all of your student loans in your consolidation loan.

You may consolidate a single loan and/or an existing direct consolidation loan.

There is no consolidation fee and no minimum or maximum loan balance.

You may choose from a variety of repayment plans, including one based on your income

You may prepay your direct consolidation loan at any time.

A typical loan consolidation requires 60 to 90 days to process, largely because each of your lenders must respond to our request to verify your loan balance.