Deadline Fast Approaching for Special Direct Consolidation Loans

By Catherine Groux
Posted June 29, 2012 10:23 AM

Students must apply for Special Direct Consolidation Loans by June 30.
Students must apply for Special Direct Consolidation Loans by June 30.
In January 2012, the U.S. Department of Education (DOE), with the support of the Obama Administration, began offering Special Direct Consolidation Loans to eligible students. However, as this was only a short-term program, degree seekers only have until Saturday to apply for one of these loans, which can make college more affordableThe Associated Press (AP) reports.

Obama launched the plan in October to allow students to consolidate multiple loans into one direct government loan, which, in turn, would help them lower their interest rate. In order to be eligible for the program, degree seekers must have at least one loan owned by the DOE and one commercially-held Federal Family Education Loan (FFEL).

By taking advantage of this offer, students can see many benefits, including a .25% interest rate reduction from their FFEL loan, the DOE's website states. Additionally, applicants can streamline their payments, as consolidation of their loans means only one bill.

So far, about 440,000 individuals with loans totaling $10.6 billion have applied for the consolidation program, DOE officials told the AP. However, for students who miss the June 30 deadline, there is no chance President Barack Obama will extend the program. The AP reports that the government is not allowed to offer interest-rate reductions as an incentive after July 1, due to 2011 legislation.

We recommend