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A Lender With a Distinguished History

The National Education Loan Network, better known as Nelnet, is a student loan servicer headquartered in Lincoln, Nebraska. Since 1978, Nelnet has been helping college students apply for, and manage, their education loans. Nelnet acts as a loan management service for loans issued under the Federal Direct Student Loan program, as well as for many private lender, or alternative, student loans. Nelnet has a single focus, to help college students manage their education loans from disbursement to final discharge, with an emphasis on making the loan process as easy and affordable as possible.

Through long experience providing loan management services for students, Nelnet has seen first hand the effect student debt can have on recent graduates. Most students will graduate college with multiple outstanding education loans, and when the time comes to repay those loans many students will find it difficult to cope with the financial burden. That’s why one of Nelnet’s flagship services is the Consolidation Loan. With Nelnet’s help, students can consolidate their multiple education loans into a single, more manageable, loan package.

Nelnet Advisers Guide Your Loan Consolidation: Decision to Approval

Once students finish college, and any applicable deferments or grace periods are exhausted, their loan repayment schedules kick into high gear. For students with multiple outstanding Federal loans, this can easily create a strain on their personal and family finances. With large multiple payments due every month, it can be difficult for man new graduates to cope. That’s where loan consolidation comes into play.

The term loan consolidation is somewhat misleading. When students consolidate their outstanding education loans, their lender, in this case the Federal government, agrees to pay off the student’s loans including all applicable fees, penalties, and accrued interest. The lender then writes a new loan agreement for the student borrower, covering the total cost of the loans that have been discharged. This new loan typically has a longer life than the student’s original loans, and provides the borrower with lower, more easily managed, monthly payments.

Loan consolidation offers relief for many students with outstanding college debt, but before choosing to consolidate, students should talk to a Nelnet loan adviser. He or she can fully explain the financial advantages and disadvantages of loan consolidation. The distinct benefit of loan consolidation is that monthly payments can be reduced by as much as 50%, significantly easing a borrower’s monthly financial burden. The downside is that the student’s total college debt will ultimately be significantly increased. The longer life of the loan will mean more accruing interest, and over time that will add to the principle of the loan. For students with multiple Federal loans, who are finding it difficult to keep up with their payments, or are at risk of default, loan consolidation through Nelnet may be the answer to their financial distress.

Federal Direct Consolidation Loans

Most loans issued under the Federal Direct Student Loan plan are eligible for loan consolidation. The U.S. government remains the student’s primary lender, and Nelnet continues to act as the intermediary management service. The following loans are eligible for the Federal Direct Consolidation loan Program.

• Federal Direct Subsidized and Unsubsidized Loans
• Federal Perkins Loans
• Federal Nursing Loans
• Health Education Assistance Loans
• Federal Direct PLUS Loans for Graduate Students
• PLUS Loans from the Federal Family Education Loan Program (FFELP)

Federal Direct PLUS Loans for Parents are not eligible for loan consolidation, and are the sole responsibility of the parent borrower. Also, loans that have gone into default (more than 270 days past due) will only be considered for consolidation after the borrower has arranged an Income Contingent Repayment Plan with the loan’s servicer. Private lender loans MAY NOT be consolidated with Federal student loans.

Consolidation Terms and Requirements

Student borrowers will only be eligible for a Nelnet-Federal Direct Consolidated Loan after they have graduated college, left school, or dropped below half-time enrollment. Borrowers must have at least one Federal student loan that is in a grace period, or on which they have begun repayment. Students who have defaulted on a Federal loan must make arrangements with Nelnet concerning repayment, and will be required to repay their new consolidated loan under the Income Contingent Repayment Plan.

Consolidated loans serviced by Nelnet offer extremely attractive terms and conditions of qualified borrowers. These include:

• No credit check for eligible borrowers
• No application fees
• No penalties for early repayment
• No minimum loan amount
• Low fixed interest rate, to be based on the weighted average of the interest rates of the loans being consolidated. Interest rates may not exceed 8.25%.
• Flexible repayment plans

Nelnet makes managing education loans easy and affordable for students at all stages of their college career. For recent graduates who may be struggling to keep up with their outstanding Federal student loans, loan consolidation through Nelnet may be the answer.