Yes. Most borrowers may change repayment plans at any time. However, borrowers who are required to repay under the ICR plan must make three consecutive monthly payments before changing to another plan. There is no limit to the number of times borrowers may change plans.
- A borrower may change to the ICR plan at any time. After the change, the borrower's repayment period will be a maximum of 25 years. If loans are not fully repaid after 25 years of repayment, any unpaid amount will be forgiven. The maximum 25-year repayment period may include prior periods of repayment under certain other repayment plans, and certain periods of economic hardship deferment. The forgiven amount may be considered taxable income. (The ICR Plan is NOT available if you have a Direct PLUS Consolidation Loan(s) made before July 1, 2006 and/or a Direct PLUS Loan(s). However, you are eligible to repay any Direct Consolidation Loan(s) made on/after July 1, 2006 under the ICR Plan even if it includes a PLUS Loan(s).)
- A borrower may change to another plan as long as the new plan has a repayment term that is longer than the amount of time the borrower has already spent in repayment. The new repayment term is determined by subtracting the amount of time a borrower has spent in repayment from the term allowed under the new plan.
20. How long does it take to consolidate my loans once I submit my application?
The consolidation process generally takes 60-90 days. Using our online Web application can reduce the amount of time it takes to consolidate a borrower's loan.
21. When can I expect my first bill?
Borrowers will receive bills from the Direct Loan Servicing Center within 60 days of the first disbursement of their Direct Consolidation Loan.
Borrowers receive monthly billing statements from the Direct Loan Servicing Center, unless they enroll in the Electronic Debit Account (EDA).
Borrowers receive a 0.25 percent discount on their interest rate for as long as they continue to make payments using EDA.
Borrowers must keep the Direct Loan Servicing Center informed of changes of address and to their names. Borrowers are responsible for making payments on time regardless of whether they receive billing statements. Borrowers should send payments to:
U.S. Department of Education
Direct Loan Payment Center
P.O. Box 530260
Atlanta, GA 30353-0260
Borrowers may prepay all or part of the unpaid balance on any Direct Loan at any time, without an early repayment penalty. If a borrower makes a payment that exceeds the required monthly payment, the prepayment will be applied first to any charges or collection costs, then to outstanding interest, and last to principal. However, if a borrower's account has no outstanding interest, the prepayment is applied entirely to principal. If the prepayment is twice the borrower's monthly payment, the next payment due date is advanced unless the borrower specifies otherwise. The borrower will be notified of a revised due date.
24. How does Total Education Indebtedness effect the repayment term of my Direct Consolidation Loan?
If you elect to repay your Direct Consolidation Loan under either the Standard or Graduated Repayment Plans, your repayment term is determined based on your consolidation loan amount and other eligible education loans that are not part of your Direct Consolidation Loan as long as you provided information about those loans on your application. Here are examples of how Total Education Indebtedness effects the repayment term for your Direct Consolidation Loan.
Your Existing Loans:
| Loan A | $ 2,500 |
| Loan B | $ 6,000 |
| Loan C | $ 2,500 |
| Loan D | $ 7,500 |
| Loan E | $ 7,500 |
| Loan F | $13,000 |
| Total Outstanding Amount | $39,000 |
Examples 1 and 2 assume that you reported all your outstanding education loans on your consolidation application.
| You Consolidate | Your Direct Consolidation Loan Amount | Your Other Eligible Education Loans | Your Total Education Indebtedness | Your Direct Consolidation Loan Repayment Term (approx.) | |
| Example 1 | |||||
| Loans A and B | $8,500 | $30,500 | $17,000 | 15 Years | |
| Example 2 | |||||
| Loans A, B, C, D, and E | $26,000 | $13,000 | $39,000 | 20 Years | |
In Example 1 you consolidated less that one-half of your eligible outstanding loans. As a result, we base your repayment term on your Direct Consolidation Loan amount plus other eligible indebtedness only in an amount equal to your new Direct Consolidation Loan:
- Direct Consolidation Loan ($8,500) + Other Eligible Education Loan Allowance ($8,500)
= Total Indebtedness ($17,000)
In Example 2 you consolidated more than one-half of your eligible outstanding loans so the calculation of Total Education Indebtedness includes all of your other eligible education loans. The result is a longer repayment term than in Example 1.
- Direct Consolidation Loan ($26,000) + Other Eligible Education Loan Allowance
($13,000) = Total Education Indebtedness ($39,000)
Finally, Example 3 illustrates the impact on your repayment term if you did not report all of your outstanding education loans on your Direct Consolidation Loan application. Your repayment plan term is shorter than in Example 1.
| You Consolidate | Your Direct Consolidation Loan Amount | Your Other Eligible Education Loans | Your Total Education Indebtedness | Your Direct Consolidation Loan Repayment Term (approx.) | |
| Example 3 | |||||
| Loans A and B | $8,500 | $0 | $8,500 | 11 Years | |
Remember that the longer your repayment term the lower your monthly payment will be. However, this usually means that the total interest paid during repayment will be higher. Only you can decide what plan is best for you. And, you can change plans later if your plan no longer suits your needs. Use our convenient online calculator to estimate your number of monthly payments, monthly payment amounts and total interest to be paid for as many different scenarios as you like.
http://loanconsolidation.ed.gov/help/faq.html
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