The time eventually comes when having hopefully earned their degree, a student has to begin repaying all those student loans that they took out over the years and for some people that can be more of a financial burden than they had bargained for.
For this reason, many students opt to try and find out about federal student loan consolidation, to see if consolidating the loans they have taken out with Uncle Sam over the years can be consolidated and their payments made a little more manageable.
Which Federal Loans can be Consolidated?
Federal student loan consolidation can usually be applied to most of the loan the federal government extends, including PLUS loans. You cannot consolidate your federal loans together with any private loans you may have taken out though, they have to be consolidated separately in an agreement with the particular lender you chose to work with.
What are the Advantages of Federal Loan Consolidation?
The key benefit of federal student loan consolidation is simply financial relief. By consolidating all your federal loans into one monthly payment, which is usually lower because you are extending the time it will take to pay them off, you are not only freeing up money for other things (like food and shelter!) every month but also simplifying your financial affairs considerably. Beware, though, that you should, if possible, not use a credit card.
Most Federal student loans are scheduled to be paid off within ten years of graduation. Federal student loan consolidation can extend that to up to thirty years, which is how the monthly payments can end up being far more affordable. You do have to consider if you want to be saddled with student loan debt for that long though, especially if you are considering purchasing a home when your debt to income ratio is a big factor in whether or not you can obtain a mortgage.
How to Get Started on the Road to Federal Student Loan Consolidation
If you are considering consolidating students loans the best place to start is with a visit to loanconsolidation.ed.gov. Here you will find tons of great information to help you decide whether or not federal student loan consolidation is really going to benefit you and whether or not you and your loans qualify for the program in the first place. See also the post about how the Cesar Chavez Student Center helps minority youth.
This is also where a student can apply directly for federal student loan consolidation. When you do apply you will need to have all your student loan information on hand as well as income details for yourself and your spouse if you are married. Let’s be glad that nowadays many students can follow the best academic courses online. Maybe that form of “globalization” is the solution.
Once you have applied the federal government will contact the lenders you took the loans from to make sure that the loans are eligible for consolidation and to determine what the actual “payoff” balance is for each of them. If you are approved the lenders will then all be paid off and you will begin making a single monthly payment that will eventually pay back everything you owed.