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 Student Loan Articles


If you are a college graduate, hopefully you are smarter, wiser and have landed a better job because of the experience. But like many recent college grads, you may also have racked up a mountain of student loan debt. In fact, the average student loan debt among college seniors is $19,237, according to a 2006 study by the National Center for Education Statistics.

Consolidating student loans may be a great way to manage your debt, lower your monthly payment, extend the duration of your loan and enable you to pay a single lender, rather than making payments to multiple lenders.

But like many other things in life, you only get to do it once, so before you consolidate student loans, you should ask yourself the following questions:

Is consolidation right for me?
Consolidating student loans is not for everyone. If you are already repaying your loans and owe just a few thousand dollars, you may not want to go through the hassles of loan consolidation. Sometimes lenders offer benefits such as reducing your interest rate for paying on-time, which you could stand to lose if you consolidate your loans with a different company. Carefully research how much you are currently paying, what your new payments would be if you consolidated, and the terms of your loans. In some instances, you may be money ahead if you stay with your current lenders.

Can all of my loans be consolidated together?
While you may have multiple student loans, it is important to remember that there are two major types of student loans- government loans and private loans. Government loans can be consolidated with other government loans, and private loans may be consolidated with other private loans. However, government loans and private loans cannot be consolidated together. The major terms for federal loan consolidations are determined by the federal government and described below; terms for private loan consolidation vary from lender to lender. You may want to check with a loan counselor before consolidating private loans.

Does it matter where I consolidate student loans?

You can get a federal consolidated loan directly from the Department of Education or from any private lending institution with government approval. While the federal government regulates the major terms of federal consolidation loans, not all of the programs are created equal. Some lending institutions may offer an interest rate reduction for on-time payment or signing up for automatic withdrawal, while others may offer different repayment options.

What do I need to consolidate student loans?

While the application form may vary slightly depending which financial institution you use, you should be prepared with your loan records, including your account number, balance owed and the name address and telephone number of the lender. Many consolidation applications will also ask you to provide references, as well as the name and address of your current employer.



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