Title 20 — EducationRelease 119-73

§1087i–2 Temporary loan consolidation authority

Title 20 › Chapter CHAPTER 28— - HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE › Subchapter SUBCHAPTER IV— - STUDENT ASSISTANCE › Part Part D— - William D. Ford Federal Direct Loan Program › § 1087i–2

Last updated Apr 6, 2026|Official source

Summary

You can combine your student loans into one Federal Direct Consolidation Loan if you have loans in two or more of these groups and you have not yet started repaying at least one of them. The Secretary will accept applications that are received on or after July 1, 2010, and before July 1, 2011. The loan groups are: loans made under this part; loans the Secretary bought under section 1087i–1; and loans made under part B that are held by an eligible lender (see section 1085(d)). The consolidation loan follows the same rules as a normal Federal Direct Consolidation Loan except for how interest is set. First, when the interest rate is figured, use the weighted average of the loan rates but do not round that average up to the next one‑eighth of one percent. Second, if a loan being paid off had a rate set under sections 1077a(g)(2), (j)(2), or (k)(2), the consolidation loan must use that applicable rate and calculate it under section 1077a(l)(3).

Full Legal Text

Title 20, §1087i–2

Education — Source: USLM XML via OLRC

(a)(1)A borrower who has 1 or more loans in 2 or more of the categories described in paragraph (2), and who has not yet entered repayment on 1 or more of those loans in any of the categories, may consolidate all of the loans of the borrower that are described in paragraph (2) into a Federal Direct Consolidation Loan during the period described in paragraph (3).

(2)The categories of loans that may be consolidated under paragraph (1) are—

(A)loans made under this part;

(B)loans purchased by the Secretary pursuant to section 1087i–1 of this title; and

(C)loans made under part B that are held by an eligible lender, as such term is defined in section 1085(d) of this title.

(3)The Secretary may make a Federal Direct Consolidation Loan under this section to a borrower whose application for such Federal Direct Consolidation Loan is received on or after July 1, 2010, and before July 1, 2011.

(b)A Federal Direct Consolidation Loan made under this section shall have the same terms and conditions as a Federal Direct Consolidation Loan made under section 1087e(g) of this title, except that—

(1)in determining the applicable rate of interest on the Federal Direct Consolidation Loan made under this section (other than on a Federal Direct Consolidation Loan described in paragraph (2)), section 1077a(l)(3) of this title shall be applied without rounding the weighted average of the interest rate on the loans consolidated to the nearest higher one-eighth of 1 percent as described in subparagraph (A) of section 1077a(l)(3) of this title; and

(2)if a Federal Direct Consolidation Loan made under this section that repays a loan which is subject to an interest rate determined under section 1077a(g)(2), (j)(2), or (k)(2) of this title, then the interest rate for such Federal Direct Consolidation Loan shall be calculated—

(A)by using the applicable rate of interest described in section 1077a(g)(2), (j)(2), or (k)(2) of this title, respectively; and

(B)in accordance with section 1077a(l)(3) of this title.

Reference

Citations & Metadata

Citation

20 U.S.C. § 1087i–2

Title 20 — Education

Last Updated

Apr 6, 2026

Release point: 119-73