Student Loan Debt Consolidation: Consolidate Student Loans

The cost of higher education is spiraling out of control.

With tuition, fees, books, meals room and board, the average student cannot obtain a quality college education without some sort of financing. Annually, $135 billion in financial aid is distributed to undergraduate and graduate students.

Students borrowed almost $17 billion more in student loans from non-federal lenders to supplement their education expenses. Adjusted for inflation, student loan debt has increased by 100% over the past ten years. It doesn’t take a loan calculator to recognize that the increased cost of education will create the need for more student loan debt solutions.

Most students see a student loan as a good investment that allows them to obtain an education, get a better job and life. However, the increased amount of student loan debt could lead to financial burden in the future. Thus, the increased student loan burden obtained today could lead to a delay in obtaining a home, car, marriage and family in the future. The solution continues to be to combine the student loans into one student loan consolidation debt.

How Does Student Loan Debt Consolidation Work?

School loan consolidation, (“federal debt consolidation”) allows the student to combine some, if not all, eligible federal student loans into one loan with a single lower monthly payment. Most students also extend the repayment term over a longer period in order to further reduce the payments. The interest rate assigned to the loan is a fixed rate which is calculated as the weighted average of the interest rates of each of the loans that are part of the consolidation effort.. Student loan consolidation rates are capped at 8.25%.

Under the federal student loan consolidation program, no credit checks are necessary, however, if any loans are in default, three consecutive payments must be made prior debt consolidation.

Eligibility For Student Loan Debt Consolidation

The following types of federal student loans are eligible for federal student loan debt consolidation:

Stafford (subsidized and unsubsidized)
PLUS SLS (Supplementary Loans for Students)
Perkins
Nursing Student Loans (NSL)
Health Education Assistance Loan (HEAL)
Health Professional Student Loans (HPSL)
Health Professions Student Loans (HPSL) Loans for Disadvantaged Students (LDS)
Federal Insured Students Loans (FISL)

What about private student loans? Unfortunately, private student loan consolidation is not available under the federal program for consolidating student loans.

How To Find A Debt Consolidation Lender

Most reputable lenders have some sort of online presence. This makes is easier to compare student loan consolidation offers. Take some time to compare different incentives and lender offers. Some lenders may offer an additional credit to principal or further reduce the interest rate on the consolidation loan if the borrower makes a certain number of payments on time. Other lenders might make an offer to a married couple to consolidate student loans of both souses into one loan.

Fortunately, in the United States, federal student loan programs give all persons access to a great education. More and more, students need to plan ahead and evaluate their borrowing needs. Fortunately, even after graduation, the borrower has options to to get out of debt using the federal student loan consolidation progam.

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