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Student Consolidation Loans

Let’s face it, college students are graduating with a mountain of student loan debt.  Tuition costs are increasing every year and it’s only expected to keep rising.  According to the Federal Reserve, student loans (federal and private) totaled almost $830 billion in June 2010.  

If your monthly student loans is becoming unmanageable causing you to miss payments or being late with payments then you are in danger of being in default.  Defaulting on a federal student loan will cause numerous problems that you don’t want.  Your credit will be damaged, your wages maybe garnished, your loan maybe given to a debt collection agency, your income taxed return maybe seized, you could get sued by your lender, and you maybe denied a professional license.  This of course all depends on your state laws.

Before defaulting on a student loan, you may want to consider consolidating your loans.  The main goal to consolidating your student loan is to combine all your loans into a single loan with a lower interest rate with one lower monthly payment that you pay to one lender.  You will also have the option to pay back the loan over a longer period of time, thus reducing your monthly payment.

Loan consolidation is similar to refinancing a mortgage or taking a home equity loan to consolidate credit card debt or pay off other high interest loans.  Pretty much every kind of federal student loan qualifies for loan consolidation.  These loans include Perkins, FFELP, FISL, NSL, HEAL, Health Professional Student Loans, Guaranteed Student Loans and Direct loans.  Loan consolidation is also available for private student loans.  However, you should consolidate your federal student loan first if you also have private loan.  Defaulting on a federal student loan will impact you more than a defaulting on a private student loan.

Another advantage with student loan consolidation is that there are no fees or costs associated with consolidation.  If you find a company who wants to charge you fees, move on. Always shop around for the best deals.

What are the benefits of federal loan consolidation?

Some of the main benefits are as follows:
  • Dealing with one lender and one monthly payment will make your debt easier to manage.  
  • You will be able to choose from multiple flexible payment options (standard, graduated, extended, income contingent, income-based repayment plans - See more information on different payment options).
  • You will be able to switch repayment plans at anytime should your circumstance change.
  • Reduced monthly payments to ease the strain of repayment.
Who is eligible for federal loan consolidation?

To qualify for federal consolidation loans, you must have at least one Direct Loan or Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default  status. If you are still in school you cannot be included in a Direct Consolidation Loan.

Can PLUS loans, Perkins Loans, Health Professional Loans be consolidation?


If one or more of my student loans is in default, do I qualify for student loan consolidation?

If you are in default, your loan may still qualify for consolidation.  

Where do I find more information on how to consolidate my federal student loan?
To consolidate your federal student loans visit
Other relevant information:


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