Student Loan Consolidation Program

The Student Loan Consolidation Program enables anyone with more than $7,500 in outstanding Federal student loans (including PLUS loans) to reduce monthly student loan repayments and lock in a low fixed interest rate.

This services is another best opportunity that graduates must grab to save on the interest charges. Visit http://www.slcp.com

When should you consolidate?

There are no deadlines in the Federal Consolidation Loan program. There are several things to keep in mind, however, regarding when to consolidate. Your loans must be fully disbursed to be eligible for a Federal Consolidation Loan. They also must be in their grace period or in repayment (including deferment or forbearance).

It is best for you to consolidate while your Federal Stafford Loans are still in their grace period, when they still have the lower in-school interest rate.

If you are consolidating your federal student loans during your grace period but are worried about losing your grace period, rest assured. Section D on the Federal Consolidation Loan application includes a question that allows you to enter your grace period end date. If a date is provided in this question, the lender won’t complete processing of the application or fund the loan until near that date. Therefore, you can apply for the consolidation loan at any time during your Federal Stafford Loan grace period, qualify for the lower in-school interest rate, and postpone the start of repayment on the debt until near the end of your grace period.

The longer you postpone funding of your Federal Consolidation Loan, however, the more interest will accrue on any unsubsidized Federal Stafford Loans (or any other federal student loans for which you are responsible for the interest) that are included in your Federal Consolidation Loan. You should also know that, while funding of your Federal Consolidation Loan is pending, interest may accrue on your Federal Stafford Loans at a different rate than the rate used to calculate your Federal Consolidation Loan interest rate.

If your loans are already in repayment, federal student loan consolidation may still be beneficial. It allows you to fix the interest rate on your federal student loans while rates are still low.

eStudentLoan

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You can use LoanFinder for instant comparisons and online applications. We will match your specific needs with loan programs from top lenders. The excerpt from their website

Our mission is to provide tools to help students and parents research and compare student loan programs. Since 1998, we've helped millions of families find the financing they need to pay for higher education. We can help you too

Should we consolidate while in school ?

This is another frequently ask question on loan consolidation. If you're still in school, you can take advantage of a loophole to consolidate now. If you're a freshman or a sophomore with more than $5,000 in debt, you'll be able to consolidate.

First, call the lender who holds your loans and ask for an early repayment status. Then you'll need to get an in-school deferment so you don't have to start paying back your bills right away.

Now you're eligible to consolidate. Once you graduate you'll have to start paying back your loans immediately, but you can always claim an economic hardship or an unemployment deferment according to Mark Kantrowitz of finaid.com.

Pro & Cons - Student Loan Consolidation

You’ve graduated from college and entered the “real world.” Now all you have to do is figure out your student loans. On average, college students graduate with a whopping $20,400 in debt. Consolidating your student loans can be helpful if you have a large balance spread out across multiple lenders. Before you apply, make sure you know the pros and cons of consolidation:

• Pro – Consolidating helps you lock in a low interest rate. Student loan rates are currently at all-time lows, making this the perfect time to consolidate your federal loans. If you consolidate, your new interest rate will be calculated by averaging the rates on your current loans. If you don’t consolidate your loans, your rates could increase in the coming years.
• Con – Consolidating can increase the overall cost of your loan. When you consolidate your student loans, the debts are combined into a new loan with a longer repayment term. This new 10-30 year term allows you to reduce the amount you have to pay each month but increases the long-term interest costs of your debts. If you can afford to pay off your current student loans quickly, it may be a good idea not to consolidate.
• Pro – Consolidation makes it easier to manage your debts. Borrowers with multiple federal student loans can have a hard time keeping track of when to pay and how much is due each month. When you consolidate your loans, you’ll only have one payment to make each month. Plus, you’ll only have one lender to deal with.
• Con – Consolidation requirements can be tough. Student loan consolidators have a set of strict requirements for potential borrowers. Your current loans must be from select lenders, your total loan amount must exceed $10,000, you must have graduated or left school already, and you must not currently be in default on your loans.
• Pro – Consolidation comes with some other perks. Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report. You can also get a better deal on a consolidation loan if you meet certain special requirements, such as if you graduate within 6 months of the consolidation period and/or if you pay your loan on time consistently.
• Con – Consolidation may not be your best option. There are other programs available to help you repay your loans or have them forgiven. Government programs exist that help borrowers repay their student loans by doing community service or becoming a teacher in certain areas. If you have a Perkins loan, there are opportunities that allow you to have the debt forgiven. It is a good idea to research all your options before you consolidate.

Life after college is hard enough without having to worry about your debts. Consolidation can help make it easier for borrowers to manage loans. Before you decide that consolidation is the right move for you, be sure to consider all the pros and cons.

Loan Consolidation Can be a Smart Move for Current Students

This is another story from Kristyn Russell on how to consolidate your loan. Much like in the rest of her very busy life, Russell took charge and made the financially responsible decision to consolidate her loans early and lower the amount she'll have to repay.

Just like many graduating seniors, Russell would have been faced with the huge task of repaying the $17,000 in loans she has accrued during her time at Wittenberg in Springfield, Ohio. According to the 2003-2004 National Post-Secondary Financial Aid Study, two-thirds (65.6%) of undergraduate students graduate with some student loan debt, and the average federal student loan debt among graduating seniors is $19,202 (Stafford and Perkins Loans). Most students are not well-educated on the facts about consolidating loans, such as getting and retaining a fixed interest rate, extending the life of their loans and lowering their monthly payments.

Russell had the advantage of working as an intern her past two summers at Knowledge Works Foundation, the parent organization of Student Lending Works (SLW), a student loan consolidation group. She learned about the benefits a non-profit student loan lender such as SLW can offer a student such as she, even before her May 2006 graduation date. She is currently consolidating loans while still in college because, "I don't want to be paying off loans the rest of my life," says Russell. "I don't want that cloud to be hanging over my head."

Another benefit of consolidating now is avoiding the interest rate hike the federal government is imposing on student loans. The rates went up once this past July, and analysts are predicting another increase in July of 2006.

Loan consolidation has helped Russell lighten the load on her already encumbered shoulders. This bright, athletic college senior has other things to worry about, including her position as the secretary of the Student Senate at Wittenberg and her role as president of the Tiger Pride, an athletic spirit club. And that's not all; Russell also holds positions on the executive boards for her school's Student Education Association and the Honor Council. In addition to those commitments, she is heavily involved with Greek life and serves on the Panhellenic Council.

Somehow, Russell still finds time to spend with her many diverse groups of friends and to pursue her passion for tennis, which she's been involved in since the age of 11. She has big plans for her future as well; and she would like to use her degree in math and science education to teach sixth grade and make efforts to change what she believes is a "flawed American educational system." Over the next 10 to 15 years, she would like to see education reforms made throughout the United States and hopes to be a part of that as either a teacher or an administrator within a school or a school system. She also wants to find time to pursue her masters' degree.

With all of her big plans, on top of impending financial decisions and obligations like rent, utilities, car payments, and beginning savings, Russell won't have to worry about how to make her loan payments. Motivated students such as she have taken steps to avoid crippling debt and the dangers of defaulting on student loans.

Russell is now free to pursue her dreams without a dark cloud hanging over her head. If all goes as planned, she would like to pay off her loans within their first 10 years, or ideally in six or seven years. Who knows, we may see Russell realize her dream of becoming the first female president of the United States someday. Or maybe she'll decide on becoming the nation's first female chairperson of the Federal Reserve.

Student Loan Consolidation

Lets talk about Student Loan Consolidation. What do you understand when we talk about student loan consolidation ?

There are several types of loans available to students. The simplest categorization is into federal student loans and private loans. Federally funded loans are administered initially through the US Department of Education's Federal Student Aid programs, and are usually the easiest to get student loan consolidation services for. These federal programs disburse about $60 billion a year in loans, work-study support and grants. Stafford loans are the most common form of federal loans for students, but there are a variety of other federal payment plans - among them military / ROTC plans to pay for college.

Private student loans are administered by standard lending institutions. Among the most common are Citibank student loans and the Sallie Mae Signature student loans. These lenders are basically providing unsecured (or in some cases secured) loans to you as a student, and will most often charge higher interest rates than their federal counterparts.

Private and federal loans, along with scholarships, can be combined to fund your education. However, it's important that when it comes time to consolidate student loans, you do not mix the two types together. You should always consolidate your federal loans first, then separately consolidate private student loan debt. The benefits of consolidating your federal loans include: a lower interest rate (usually, but keep in mind that interest rates change every July 1), increasing the time for loan repayment to 30 years which reduces your monthly costs, and reducing the number of lending institutions you send checks to every month. For a more complete discussion of this topic and consolidation eligibility criteria, visit our page on how to consolidate student loans. Medical student loans fall into a special class, and are discussed on our medical school loans page.