Consolidation 101:
Everything you need to know. |  |
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 Here you are, finally ready to graduate. You've gained so much over the past several years-knowledge, new friends, and if you're like most students, you've also racked up quite a few student loans. You probably still have a few months left before your grace period ends and you have to start worrying about repaying your loans. But if college has taught you anything, it's that time flies. Why not take a minute right now to think about student loan consolidation? It might help lower your monthly payments and simplify your life in the future.
What is Student Loan Consolidation?
Established by Congress to help student loan borrowers burdened with educational debt, the Consolidation Loan Programs allow you to combine all of your eligible federal student loans into a single new loan, typically resulting in a significantly lower monthly payment due to the flexible repayment and extended repayment term features.
Who can qualify for student loan consolidation?
- Borrowers who are currently in their grace or repayment period and who owe money on eligible federal student loans.
How can consolidation help me manage my debt?
Loan consolidation can offer you many benefits to help manage your education debt. Here are a few of them:
- Lower monthly payments by as much as 45%
- A single monthly loan payment on one bill
- Low, fixed interest rates
- No application fees or credit checks
- A variety of flexible payment plans that allow you to design a repayment plan that best suits your financial needs
- No penalties for prepayment, so you can repay your loan early at any time
- A personal loan counselor who can answer your questions and help you through the application process
Is there a downside to consolidation?
 Although consolidation can truly simplify and help many students manage their monthly payments, there are some cases when consolidation may not be right for you.
- If you are close to paying off your student loans, it may not make sense to consolidate or extend your payments
- Remember that by extending the years of repayment for your loans, you may be increasing the total amount you have to pay in interest. Be sure to discuss your options with a loan counselor before you select a payment plan.
- Not all programs offer the same borrower benefits; make sure you choose a reliable program that offers good borrower benefits and reliable service.
What kind of loans can I consolidate?
You can consolidate any of the following loans:
(Combined loan amounts must equal $20,000 or more to consolidate)
- Federal Stafford Loans, unsubsidized and subsidized [including Guaranteed Student Loans (GSL)]
- Direct Stafford Loans, unsubsidized and subsidized
- Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students/ALAS and Student PLUS Loans)
- Federal Perkins Loans, formerly National Defense/National Direct Student Loans (NDSL)
- Health Professions Student Loans, including Loans for Disadvantaged Students (HPSL)
- Federal Insured Student Loans/FISL
- Federal PLUS Loans (Parents and Graduate/Professional Students)
- Direct PLUS Loans
- Federal Consolidation Loans
- Consolidation Loans
- Nursing Student Loans (NSL)
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