| Should I consolidate my college loans or not? | | | | which is when a borrower pools his student debts |
| 1. Still in school, yes! Rates are low, but they're | | | | together so that only one monthly payment is |
| scheduled to go up. Your college loan payments will | | | | necessary, rather than several. It's not just the |
| then remain as manageable as possible when you | | | | convenience of one payment that is making |
| leave school. If you have graduated, or will be | | | | consolidation so compelling. The most significant |
| graduating this May or June, yes! Graduates can lock | | | | aspect of the program is that it allows a person to |
| in historical low rates, and reduce their monthly | | | | permanently lock in a lower interest rate on loans. |
| payments more than half. You can lock in a rate | | | | These loans are backed by, or granted directly by, |
| even while still in school, and even if you have been | | | | the federal government. |
| out of school for a couple of years can get a good | | | | 7. Rates for federal Stafford loans, the most |
| deal, too. | | | | prevalent type of student loan, as well as some |
| 2. The newest twist in the consolidation puzzle is the | | | | other types of federal student loans are set annually |
| "in school consolidation", affecting students who are | | | | based on the rate of 91-day U.S. Treasury bills at the |
| currently enrolled and will be enrolled past the July 1 | | | | end of May. The exact rate won't be known until the |
| consolidation. You can consolidate your existing | | | | end of the month, but experts say it will be about 2 |
| college loans now to secure the low rates for at | | | | percentage points higher. (Private loans and federal |
| least part of their student loan portfolio. | | | | loans cannot be consolidated together.) |
| 3. Consolidating could save thousands of dollars in | | | | 8. For the first time, the U.S. Department of |
| interest payments on college loans. There are | | | | Education will allow students still in school to |
| impending student loan rate changes and new | | | | consolidate federally backed loans. Federal PLUS loans |
| interpretation of regulations by the Department of | | | | can also be consolidated. PLUS loans are used to help |
| Education, also, Congress is considering ending the | | | | pay the cost higher education. |
| fixed-rate program. Experts are urging students to | | | | 9. Students, regardless of enrollment, should |
| consolidate to relieve themselves of a higher debt | | | | absolutely consolidate their college loans, arranged |
| load. | | | | through the student's lender. There are no fees, no |
| 4. Many students and families are looking for a simple, | | | | credit checks, and interest rates are expected to |
| clear answer about whether to consolidate college | | | | move higher. Those are good reasons to consolidate. |
| loans or not. The simple answer is to take some of | | | | 10. Act quickly to put lock on current federal-aid |
| the bite out of the debt by loan consolidation. You | | | | interest rates. Graduates should act now to insulate |
| could live like a miser and save as much money as | | | | themselves from a drastic rate change. Apply early. |
| possible or consolidate your federal student loans | | | | Do not wait until the last minute to file paperwork. |
| now. | | | | Those who have already graduated or left school |
| 5. For students still in school, you have an opportunity | | | | should not wait to investigate consolidation. In the |
| to choose consolidation. Consolidating would put a | | | | first six months after graduation, you are in a grace |
| college loan borrower into repayment status, but the | | | | period. Within that six-month window, you can lock in |
| student can defer payments until after graduation by | | | | a low rate on Stafford loans and spread the |
| making a deferment request. Consolidating today can | | | | repayment over as long as 30 years. |
| have payments put off until graduation. | | | | If you're going to consolidate, now is the best time |
| 6. The federal loan program allows consolidation, | | | | to do it. |