§1087i–2 Temporary Loan Consolidation Authority

Summary

Lets a borrower who has loans in at least two of three loan types combine those loans into a Federal Direct Consolidation Loan, as long as the borrower has not started repayment on one or more of those loans. The three loan types are: loans under this part; loans bought by the Secretary under section 1087i–1; and part B loans held by an eligible lender (see section 1085(d)). Applications must be received on or after July 1, 2010 and before July 1, 2011. The consolidation loan follows the same rules as other Federal Direct Consolidation Loans under section 1087e(g), except for how interest is figured. For most of these loans, compute the weighted average interest rate without rounding it up to the nearest one‑eighth of 1 percent. If the consolidation repays a loan that uses the special rates in sections 1077a(g)(2), (j)(2), or (k)(2), use those rates and calculate the rate under section 1077a(l)(3).