Consolidating Perkins Loans
You can consolidate PerkinsLoans into a Direct Consolidation Loan if you include at least one Direct Loan or Federal Family Education Loan (FFEL) in their request. Perkins Loans cannot be included in a Direct Consolidation Loan by themselves. In addition, all Perkins Loans consolidated into the Direct Loan Program will be included in the unsubsidized portion of the Direct Consolidation Loan.
However, you should bear in mind that while gaining the benefits of the Direct Consolidation Loan Program, you also lose the benefits associated with the Perkins Loan Program. Before making a decision on consolidating Perkins Loans, there are some aspects you need to think about.
Thus, when you include a Perkins Loan in a Direct Consolidation Loan, you lose cancellation benefits, such as performing certain kinds of public service (like being a nurse, a law enforcement officer). In other words, you’ll pay full price for your Perkins student loan.
Moreover, you lose the six-nine month grace period you have for the Perkins Loan if you consolidate. Moreover, as a Perkins Loan is included in the unsubsidized portion of a Direct Consolidation Loan, you as a borrower are responsible for the interest that accrues throughout the deferment period.
However, Perkins Loans do have a fixed repayment period of ten years, while the repayment period is more flexible for direct consolidation student loans. Thus, the latter can have standard, extended, graduates and income contingent repayment plans, which can lead to a lower monthly payment.
Overall, Perkins student loans are not as well suited for consolidation as Stafford and PLUS federal loans. It is best to speak to your lender, which is your college or university in most cases. They usually know best what your options are and have access to all your payment and account information.