Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

(DLB - 00 - 15) Direct Consolidation Loan - A Debt Management Tool!

Bulletin ID
DLB - 00 - 15
PublicationDate: 4/1/2000
BulletinID: DLB - 00 - 15

April 2000

DLB 00-15

Subject: Direct Consolidation Loan – A Debt Management Tool!

Dear Partner:

With only one lender to deal with and one monthly bill, your student loan borrowers will find it easier than ever to manage their education debt. That's not all! Borrowers may lock-in a lower interest rate and/or benefit from our interest rate discount. Below, we discuss these and other advantages of a Direct Consolidation Loan. Just remember, borrowers are not excluded based on the size of their loan debt, and consolidation is FREE!

Lower Interest Rate

As you know, students who consolidate their loans while in school or during their grace period may receive a lower interest rate. This saves your students money!

Student borrowers who consolidate loans while in school receive a six-month grace period on ALL loans being consolidated. In-school consolidation is a benefit offered only by Direct Consolidation Loans.

Weighted Average Interest Rate

The interest rate is the weighted average of the interest rates for all loans being consolidated, rounded to the nearest higher one-eighth of one percent. This rate will not exceed 8.25%. To calculate a student's weighted average interest rate, use our interactive calculator at

Student borrowers, who consolidate education loans before July 1, 2000 (when interest rates are expected to change), may lock-in a weighted average based on their current interest rate.

Interest Rate Discount

Electronic debiting is a convenient way for borrowers to make their monthly loan payment. All borrowers who repay their student loans using electronic debiting receive a quarter of one percentage point discount.
Flexible Repayment Options
One size does NOT fit all! A Direct Consolidation Loan offers borrowers four convenient and hassle-free ways to repay their loans. These options are flexible so that they meet the different and changing needs of borrowers.

Who Is Eligible?

Borrowers in school
Must be enrolled at least half time AND include at least one Direct Loan or Family Federal Education Loan (FFEL) that has never entered repayment

Must include at least one Direct Loan if attending a non-Direct Loan school

Borrowers out of school

Must include at least one FFEL* or Direct Loan

Got Questions? We've Got Answers!

If you have questions or need additional information, contact us via:

Web site at You and your students can find answers to commonly asked questions and much, much more!

Phone at 1-800-557-7392 (or 1-800-557-7395 TDD)

E-mail at

Note: FREE upcoming training sessions have been designed specifically for you and other financial aid professionals. View the training locations and dates identified in
GEN-00-04, then register by clicking on the “Register Now” icon.


Margaret E. White
Acting Lead, Title IV Delivery
Schools Channel

Last Modified: 04/02/2000