<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=us-ascii">
<META content="MSHTML 6.00.2800.1458" name=GENERATOR></HEAD>
<BODY style="COLOR: #000000; FONT-FAMILY: Tahoma" hb_focus_attach="true">
<DIV><FONT size=2>
<DIV><FONT size=2>
<DIV><FONT size=2>FFELP borrowers now have the option of consolidating their
student loans while they are enrolled in school. However<SPAN
class=499180021-19052005>,</SPAN> this will require borrowers to request to
enter repayment early. Clarification of this guidance was recently released in
</FONT><A title=http://www.ifap.ed.gov/dpcletters/GEN0508.html
href="http://www.ifap.ed.gov/dpcletters/GEN0508.html"><FONT
title=http://www.ifap.ed.gov/dpcletters/GEN0508.html size=2>Dear Colleague
Letter (DCL) GEN-05-08</FONT></A><FONT size=2>.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>In order to accomplish an in-school consolidation, borrowers
must request the following from the lender:</FONT></DIV>
<UL>
<LI><FONT size=2>Request to enter repayment early - Borrowers must request
that the lender allow them to enter repayment early. This will require the
borrower to permanently forfeit their grace period on the loans in question.
Note: Lenders are not required to grant a borrower’s request to enter
repayment status early.</FONT>
<LI><FONT size=2>Request to be placed in an in-school deferment status –
Borrowers who also request to be placed in a deferment status are eligible for
a deferment interest rate for the set of loans being consolidated. This rate
is the same as an in-school rate and can be used by the lender as they
calculate the weighted average interest rate for the consolidation
loan.</FONT></LI></UL>
<DIV><FONT size=2>Since interest rates are expected to rise after July 1, many
borrowers may wish to take advantage of this opportunity. However, they will
need to carefully determine if consolidation is the best choice. Potential
disadvantages of this option include:</FONT></DIV>
<UL>
<LI><FONT size=2>Loss of six-month grace period: When the student borrower
graduates or drops to less than half-time status, they must begin making
immediate payments<SPAN class=499180021-19052005> on the consolidation
loan</SPAN>.</FONT>
<LI><FONT size=2>Impact on benefits and other loan deferment/discharge
options: As with any consolidation decision, borrowers should carefully
consider the impact of extended repayment on the total interest paid over the
life of the loan as well as any potential loss of deferment or discharge
options.</FONT></LI></UL>
<DIV><FONT size=2>Additional information on this topic can be found
in </FONT><A title=http://www.ifap.ed.gov/dpcletters/GEN0508.html
href="http://www.ifap.ed.gov/dpcletters/GEN0508.html"><FONT
title=http://www.ifap.ed.gov/dpcletters/GEN0508.html size=2><SPAN
class=499180021-19052005
title=http://www.ifap.ed.gov/dpcletters/GEN0508.html>G</SPAN>EN-05-08</FONT></A><FONT
size=2>. The letter also includes a set of Questions and Answers regarding
permitting borrowers to enter repayment early. If you have further questions,
you may contact <SPAN class=499180021-19052005>OGSLP's </SPAN>Policy
Implementation, Training & Communications division.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV><FONT size=2>
<P>Policy Implementation, Training & Communications<BR>OGSLP<BR>405.234.4440
or 800.247.0420<BR></FONT><A title=mailto:policytrainingcommunications@ogslp.org
href="mailto:policytrainingcommunications@ogslp.org"><U
title=mailto:policytrainingcommunications@ogslp.org><FONT
title=mailto:policytrainingcommunications@ogslp.org color=#0000ff
size=2>policytrainingcommunications@ogslp.org</U></FONT></A></P></FONT></DIV></FONT></DIV>
<DIV><B><FONT face="Arial Narrow" color=#808080 size=2>Note: </FONT></B>
<FONT face="Arial Narrow" color=#808080 size=2>This communication and
attachments, if any, are intended solely for the use of the addressee
hereof. In addition, this information and attachments, if any, may contain
information that is confidential, privileged and exempt from disclosure under
applicable law. If you are not the intended recipient of this information,
you are prohibited from reading, disclosing, reproducing, distributing,
disseminating, or otherwise using this information. If you have received
this message in error, please promptly notify the sender and immediately, delete
this communication from your system.</FONT></DIV><BR>
<DIV> </DIV>
<P></P></BODY></HTML>