"Consolidating" Unsubsidized FFEL into Direct Consolidation Loan

[IngyHere]

So I was thinking of consolidating my Unsubsidized FFEL (Nelnet/Chase) into a Direct Consolidation Loan (US ED). This would transfer my loan to be completely federal. There would be no change in interest rates. My current loan has a roughly $11k balance and originated in 2006. 

My reasoning behind this is that my loan would then be available for better federal benefits, such as deferments and subsidized forbearance (I think). One of those benefits might be elegibility for federal loan forgiveness. I don't know what will happen on the loan forgiveness front but the limited actions already taken only apply to US ED loans. So it stands to reason that any future actions may also only apply to federal loans. 

The reason I'm hesitating is that it may have impact my credit profile. That would mean closing a long time loan and creating a brand new loan for much less. 

Will my FICO take a dive if I consolidate it through US ED? Is it worth the damage to a credit report to take a chance on a very uncertain loan forgiveness program? Any advice is appreciated, and thank you.

[LaHossBoss]

---

@IngyHere wrote:

So I was thinking of consolidating my Unsubsidized FFEL (Nelnet/Chase) into a Direct Consolidation Loan (US ED). This would transfer my loan to be completely federal. There would be no change in interest rates. My current loan has a roughly $11k balance and originated in 2006. 

My reasoning behind this is that my loan would then be available for better federal benefits, such as deferments and subsidized forbearance (I think). One of those benefits might be elegibility for federal loan forgiveness. I don't know what will happen on the loan forgiveness front but the limited actions already taken only apply to US ED loans. So it stands to reason that any future actions may also only apply to federal loans. 

The reason I'm hesitating is that it may have impact my credit profile. That would mean closing a long time loan and creating a brand new loan for much less. 

Will my FICO take a dive if I consolidate it through US ED? Is it worth the damage to a credit report to take a chance on a very uncertain loan forgiveness program? Any advice is appreciated, and thank you.

---

Me and my SO also have boat loads of FFEL SLs. I hate to discourage, but I do not think FFEL SLs are going to qualify for any forgiveness. They havent really been included in any programs thus far, so I do not see them suddenly forgiving those types of SLs. Maybe if they were held directly through FedLoan (my SO has 4 FFEL right throufh FedLoan and they are currently in Cares Act Forebearance, whereas all the rest of our FFELs are held with private servicers and do not qualify whatsoever), but even at that, I am not sure because of the FFEL stanp would they let them be forgiven.

You can currently get all the same FedLoan benefits as any direct loan like deferment and forebearance and IBR plans (with the exception of a few like PAYE and REPAYE).

Technically all FFEL SLs are FedLoans, but most programs only apply to DirectLoans issued after 2010. I have loans from 2010, but somehow they do not count, while my SO has SLs from 2010 and do count (as I mentioned above).

I just wouldn't hold my breath.

[calyx]

I consolidated my FFELs ~3 years ago.    Honestly, other than a new account/age penalty (which is really only a problem if you're going to go for  mortgage in the next year or so), there will probably be little impact to your credit score.