| Earning a college degree is one of the most | | | | minimum amount in PLUS loan debt are also eligible to |
| important - and expensive - things you will do in your | | | | consolidate. |
| life. If you are able to attend college without having | | | | If an individual chooses to consolidate his or her |
| to take out any student loans, you are one of the | | | | federal student loans, the loans can be consolidated |
| lucky few. Most individuals have to borrow at least | | | | through a private lender, and the borrower can only |
| some of the money they need for tuition, books, | | | | consolidate again through the U.S. Department of |
| and living expenses. And upon graduation, you are | | | | Education. Upon consolidation, the loan is charged a |
| faced with the challenge of repaying all of those | | | | fixed interest rate that does not change even if the |
| loans after the grace period ends, whether you are | | | | loan is reconsolidated. And, with a federal student |
| employed or not. That can be a hard dose of reality | | | | loan consolidation program, there are no fees applied |
| when you realize that not paying your loan payments | | | | or closing costs to be paid. This differs from private |
| on time, or not paying them at all can have grave | | | | lender debt consolidation. |
| consequences where your credit rating is concerned. | | | | Taking advantage of a federal student loan |
| That is why it is smart to consider a federal student | | | | consolidation program can be beneficial to your credit |
| loan consolidation program. | | | | history, by helping it stay clean. It is easier to keep |
| Loan consolidation entails taking out a single loan in | | | | track of and remit 1 monthly loan payment than to |
| order to pay off several others. This is done for | | | | keep track of 2 or more student loan debts, |
| convenience, as you can often get a lower interest | | | | especially if you move frequently. And losing track of |
| rate, and you only have 1 monthly loan payment to | | | | a federal loan is never a good idea. |
| keep track of. It is also good for your credit history. | | | | Loan consolidation is especially good if you are having |
| Often, student loans are guaranteed by the United | | | | trouble making all of your scheduled loan payments |
| States government. With a federal student loan | | | | on time. Defaulting on your student loans is a very |
| consolidation program, currently held loans are | | | | unfortunate situation to be in, and can lead to having |
| purchased and closed either by a loan consolidation | | | | property and possessions taken from you in order to |
| company or by the U.S. government. Who handles | | | | pay the debt. You can also consider requesting loan |
| the loans depends upon what type of federal loans | | | | forbearance from your lender, which allows you to |
| the borrower has. | | | | take a break from your payments, or make |
| The interest rates for Federal student loan | | | | interest-only payments. However, the longer you |
| consolidation programs are very reasonable. They are | | | | wait to pay your debt, the longer it will be hanging |
| lower than your average bank loan. They are | | | | over your head. With consolidation, repayment is |
| calculated based on the current year's student loan | | | | extended over a longer period of time which, in |
| interest rate, and in turn calculated based on the | | | | addition to the single lower interest rate you will have |
| 91-day Treasury bill (a government bond used as a | | | | on your loan, they payment are lower and more |
| debt-financing vehicle of the U.S. Federal government) | | | | manageable within your budget. |
| rate at the previous auction (held every year in may) | | | | If you are interested in a student loan consolidation |
| of the year. The interest of student loans are | | | | program, you can consult the U.S. Department of |
| variable, but can not go over the maximum of 8.25% | | | | Education, or one of the lenders with whom you |
| for Stafford Loans and 9% for PLUS loans (Federal | | | | currently have a student loan for information. During |
| parent loans). | | | | the application process, you can learn exactly which |
| Student loan consolidation programs are available to | | | | of your loans qualify for consolidation (hopefully they |
| former students who have more than a minimum | | | | all do!), and be on your way to more manageable |
| amount of federal student loan debt (usually more | | | | student loan payments. |
| than about $10,000). Parents with more than a | | | | |