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Special Direct Consolidation Loans

The U.S. Department of Education's (the Department's) Special Direct Consolidation Loan opportunity allows certain borrowers who have at least one William D. Ford Federal Direct Loan (Direct Loan) Program loan or Department-held Federal Family Education Loan (FFEL) Program loan and at least one commercially-held FFEL Program loan to consolidate their eligible commercially-held FFEL Program loans into a Special Direct Consolidation Loan. After a borrower's commercially-held FFEL loans are consolidated, the new Special Direct Consolidation Loan will be serviced together with the borrower's other Department-held loans. The servicing will be done by one federal loan servicer.

The Special Direct Consolidation Loan application period ends at 11:59 P.M. (ET) on June 30, 2012.

  • Through 11:59 P.M. (ET) on June 30, 2012, click here to log in using your Federal Student Aid PIN, check your eligibility, and apply.

    The online application process includes these easy steps: check pre-filled information, enter employer and personal reference information, confirm that you have read important loan terms, sign, and submit.

  • After 11:59 P.M. (ET) on June 30, 2012, Special Direct Consolidation Loan applications will no longer be accepted.

For an overview of Special Direct Consolidation Loan information for borrowers who submit applications through 11:59 P.M. (ET) on June 30, 2012, see the questions and answers below.

Can I get a copy of the application and promissory note that I submit online?

Yes. At the end of the Special Direct Consolidation Loan online application process, you will be able to access and print a paper copy of the entire electronic record of your application and promissory note. You will also be able to return to StudentLoans.gov at any time to view your completed application (and to print a copy for your records). After signing in, simply click on My Completed MPNs under My Loan Documents.

What happens after I submit my online application for a Special Direct Consolidation Loan?

After you submit your application through the online process, you will first view a screen confirming your submission and providing the name and contact information for the Department's servicer to which your application will be transmitted. If you include an e-mail address during the application process, you will receive an e-mail that includes the confirmation information. The Department will then transmit your application to the servicer for next steps. If you include an e-mail address during the application process, you will receive a second e-mail confirming the transmission of your application to the servicer and providing the servicer's name and contact information.

The servicer that receives your application will contact the FFEL Program lenders or lender servicers that hold your commercially-held FFEL loans to verify the eligibility and payoff amounts of the loans that you wish to consolidate. After this verification process is complete, the FFEL lender will receive the payoff funding from the Department and your Special Direct Consolidation Loan will begin to be serviced by the Department's servicer. Until your commercially-held FFEL loans have been paid off, you will continue to receive statements and bills from the FFEL Program lenders or lender servicers of those loans.

Will my consolidation be complete as soon as I submit my online application for a Special Direct Consolidation Loan?

No. As explained in the previous question and answer, the servicer that handles your consolidation will need to verify the eligibility and payoff amounts of the commercially-held FFEL loans that you wish to consolidate. Then, your loans will be paid off and your Special Direct Consolidation Loan will begin to be serviced by the Department's servicer. Until your commercially-held FFEL loans have been paid off, you will continue to receive statements and bills from the FFEL Program lenders or lender servicers of those loans.

Can I make changes to my application for a Special Direct Consolidation Loan after I submit my application through the online process?

If it is necessary to make changes after you submit your Special Direct Consolidation Loan online application, you will do so through the Department's servicer that is handling your consolidation. You will not be able to make any changes to the application through StudentLoans.gov after the application has been submitted.

The Department's servicers for this special initiative are FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae. To locate contact information for the servicer handling your consolidation, refer to:

  • The second e-mail you receive after you complete the online application (the e-mail that lets you know your application has been transmitted to the servicer)
  • Other Special Direct Consolidation Loan correspondence you receive from the servicer
Can I cancel my application for a Special Direct Consolidation Loan after I submit my application through the online process?

You may cancel a pending Special Direct Consolidation Loan application up to the point when the first commercially-held FFEL loan you wish to consolidate has been paid off by the Department. However, once the first loan has been paid off, the application cannot be cancelled.

To request cancellation of a pending Special Direct Consolidation Loan application, you must communicate with the Department's servicer that is handling your consolidation. The servicer will let you know if it is still possible for you to cancel the application.