You may apply for a federal consolidation loan at any time; however, keep the following in mind:

If you currently have a variable interest rate loan, be aware that your interest rate changes annually on July 1. We are notified of the annual changes by June 1, and we post these changes on this website under the What's new in loans section. If the rate is expected to increase on July 1, plan to apply for a consolidation loan prior to June 30. If the rate is expected to decrease on July 1, plan to apply after the rate changes.

If you currently have a variable interest rate loan with six month grace period, it may make sense to hold off on consolidating until 45 days prior to the end of the grace period. By waiting until the latter part of your grace period you will receive most of your grace period and still receive the benefit of the lower rate charged during the grace period. The grace period interest rate is lower than the repayment period rate by 0.60 percent so by consolidating during the grace period your fixed rate will be lower. Consolidation loans do not have grace periods, so if you apply too early during your current loan's grace period, you run the risk of having your first payment be due before your grace period ends.

Borrowers may not apply for a consolidation loan when their loans are in an in-school status. You must apply during your grace period or after you begin repayment. You may also apply when your loan is in a deferment or forbearance status. Your loan may be in a deferment status while you are enrolled in school. For example, a student who had taken a leave of absence and then returned to school would have a deferment status on the loans borrowed prior to the leave. To determine your loan status, contact your loan servicer.