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.
