UHEAA In-School Loan Consolidation Program
The Utah Higher Education Assistance Authority (UHEAA) will offer borrowers with in-school loans the ability to lock in a low interest rate through loan consolidation. Borrowers must meet one of the following requirements to qualify for an in-school consolidation loan from UHEAA:
UHEAA also requires a minimum of $5,000 of eligible loans to be consolidated under the in-school consolidation program. Student borrowers who have graduated, withdrawn or otherwise left school, need only meet a $1,000 minimum balance for regular consolidation loans.
Borrowers with in-school loans wishing to consolidate must complete a Request to Enter Repayment Early form found on UHEAA’s Web site at www.uheaa.org. This form, in addition to a completed, original Federal Consolidation Loan Application and Promissory Note, must be received by UHEAA prior to the close of business on June 30, 2006. Schools should refer in-school consolidation borrowers to UHEAA Borrower Services at 877.336.7378 or 801.321.7294.
Upon receipt of the Request to Enter Repayment Early form and a completed application, UHEAA will provide a repayment schedule and apply an in-school deferment on the loans it services based on the latest enrollment information. Any accrued interest on unsubsidized loans will be capitalized at the time of consolidation. The Federal Consolidation Loan interest rate will then be calculated according to the current deferment rate. UHEAA will provide a copy of the borrower’s request for immediate repayment to the holders of the borrower’s non-UHEAA loans. It will be the borrower’s responsibility to follow-up with non-UHEAA lenders to ensure those loans are placed in immediate repayment and a deferment has been applied.
It is important to note that borrowers choosing to consolidate while still in school must agree to waive the 6-month grace period that may pertain to each of the Stafford loans being consolidated. Once waived, the grace period cannot be reinstated even if the borrower does not complete the consolidation process. There is no grace period on a Federal Consolidation Loan, but borrowers may retain eligibility for an in-school deferment.
UHEAA offers the following borrower benefits on Federal Consolidation Loans:
Current borrower benefits offered by UHEAA for Stafford and all PLUS loans include a credit to the loan balance of an amount equal to the 3% origination fee originally deducted from the loan when the loan is sold to UHEAA’s secondary market. A borrower will lose the origination fee credit benefit if he or she chooses to consolidate with another lender. Borrowers considering consolidation should be advised of this as well as the above benefits offered by UHEAA. Furthermore, the original lender would also lose any purchase premium offered by UHEAA on such loans.
Any questions related to this Bulletin should be directed to UHEAA Policy and Training at 801.321.7166 or by e-mail to mjohnson@utahsbr.edu.