| First, the interest will likely be far less than the | | | | that can extend up to 30 years, depending on the |
| interest of the market. Most students take out a | | | | amount that is owed. |
| Stafford loan because they do not require any form | | | | 3. Thankfully, there's no fee for consolidating your |
| of credit that students should qualify for. Like the | | | | government student loans and there's no credit |
| Perkins and Plus college loans, the Stafford college | | | | check when you consolidate your government |
| loans are subsidized, which means that while you are | | | | student loans. 4.There's also no penalty for paying |
| in school, the government will pay the interest of | | | | the loan off early. |
| your student loan. | | | | Disadvantages to Student Loan Consolidation |
| You might also need to get an unsubsidized loan or | | | | 1. Taking an extended payment plan means paying |
| two. But the good news is that you do not have to | | | | more interest in the long run. Higher loans mean more |
| pay it until you graduate and start making monthly | | | | interest. |
| payments off your loans. | | | | 2. The consolidated student loan rate might be higher |
| Usually the interest rate on Stafford loans and most | | | | than the interest rates on your other loans. |
| loans is low but it is an investment in your future | | | | 3. Consolidating your loans during the six month grace |
| which will likely benefit your lifetime salary. Another | | | | period after graduation results in loosing the |
| benefit of loans is that they also offer the benefit of | | | | remainder of the grace period. |
| offering flexible payment arrangements; you can | | | | 4. Consolidation is not to your advantage if you've |
| even defer your loans for an extended period of | | | | already paid off a large of your student loans. |
| time if you are trying to find employment. | | | | 5. Finally, check whether you end up forfeiting the |
| To qualify for any of the federal programs, the | | | | special benefits that come with other federal student |
| student must enroll at least half-time in school and | | | | loans such as Plus and Perkins loan if you end up |
| can be either a graduate or undergraduate student. | | | | consolidating your federal student loans. |
| The grade level of the student determines the | | | | What College Students Need to Know about |
| amount of the loan during a given academic school | | | | Stafford Loans |
| year. Financial need is not necessary to qualify for | | | | Student loans are one of the most popular methods |
| federal student loan programs and Stafford loans in | | | | used to help pay for college, but understanding how |
| particular, can be paid back up to 30 years depending | | | | each one works is confusing. Like the Perkins and |
| how much was originally borrowed. | | | | Plus Loans, Stafford loans are a type of federal loan |
| Advantages and Disadvantages of Federal Student | | | | program which can either be subsidized or |
| Loan Consolidation | | | | unsubsidized. With a subsidized loan, the government |
| Student loan consolidation is a process that allows | | | | will pay the interest that accrues while the student is |
| students to combine all federal and private student | | | | in school while the interest with unsubsidized Stafford |
| loans and make one monthly payment. However it | | | | loans will accrue until the student pays the loan |
| may not be an option for every college student | | | | balance. |
| approaching graduation day or a recent college | | | | Depending on the type of Stafford loan, the student |
| graduate. Here's some information about whether | | | | can borrow the money either from a bank or a credit |
| federal loan consolidation is right for you. | | | | union, or from the Department of Education. The |
| Bank lenders and consultants dissuade against | | | | interest rate for Stafford loans varies from each |
| consolidating private and federal loans together | | | | year, but is typically lower than the general consumer |
| because the new consolidated loan will then be a | | | | market, which of course is an important factor when |
| private loan and you will therefore loose all the | | | | paying back the loans. |
| benefits that came with the federal loans, such as | | | | How Do Stafford Loans Work? |
| loan deferment if you decide to pursue graduate | | | | In order for a student to qualify for Stafford loans |
| school. | | | | the student must enroll at least half-time in school |
| So what are the pros and cons of federal student | | | | and can be either a graduate or undergraduate |
| loan consolidation? This question depends partly on | | | | student. The grade level of the student determines |
| how much you owe, how much you've already paid, | | | | the exact amount the student is permitted to |
| and other personal financial variables. Here is a brief | | | | borrow on the student loan. The amount subsidized is |
| overview: | | | | limited to a certain amount that is comparable to the |
| Advantages of federal student loan consolidation | | | | total loan value the student borrowed that same |
| 1. By consolidating your loans, you make one | | | | year. Financial need is not necessary to qualify for |
| convenient payment that is also lower in amount. The | | | | Stafford loans and they may be paid back within |
| federal interest rate is also likely to be lower than the | | | | twenty-five to thirty years, depending on the type |
| combined interest of your original loans. | | | | of Stafford loan and the total amount that was |
| 2. Borrowers can choose from four different | | | | borrowed. In certain circumstances students have |
| payment plans, including an extended payment plan | | | | various repayment options. |