Normally, when you consolidate your existing loan(s) into a new Direct Consolidation Loan, you will be required to start repayment of your new loan immediately. However, if any loan you want to consolidate is still in a grace period, you can delay entering repayment on your new Direct Consolidation Loan until closer to your grace period end date by entering your expected grace period end date (month and year) in the space provided on the application. We will start processing your application about 45 days before the expected grace period end date that you provide. If you leave the expected grace period end date blank on your consolidation application, your Direct Consolidation Loan will enter repayment immediately.
You can select a date up to nine (9) months into the future. If your grace end date is more than 9 months away, wait to submit your application.
Default
Failure to repay a loan according to the terms agreed to when borrowers signed their promissory notes. Default occurs when a Direct Loan borrower becomes 270 days delinquent in making payments on their loan(s). The consequences of default can be severe.
Default Aversion
The activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.
Deferment
A deferment is a temporary suspension of a borrower's monthly loan payment. There are many different types of deferments available.
During deferment of subsidized loans, principal payments are postponed and interest does not accrue.
During deferment of unsubsidized loans, principal payments are postponed but interest continues to accrue. Accrued unpaid interest will be added to the principal balance (capitalized) of the loan(s) at the end of the deferment period. This will increase the amounts borrowers owe.
Delinquent
Delinquency status indicates that borrowers’ accounts have become past due on payment. This occurs when borrowers’ loan payments are not received by the due dates. Accounts remain delinquent until borrowers bring their accounts current with payments, deferments, or forbearances. If borrowers’ accounts have become delinquent and the borrowers are unable to make payments, deferments or forbearances should be considered.
Dependent student(dependent undergraduate student)
A student who does not meet any of the criteria for an independent student. An independent student is at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.
Direct Loan Servicing Center
The U.S. Department of Education's agent contracted to collect Direct Loans and handle deferments, forbearances, and repayment options.
