Type of Federal Loans that can Be Consolidated?

College graduates may find repaying their federal student loans to be a difficult burden while entering the professional workforce. Often, the jobs college graduates land after completing their degrees pay substantially less than positions for more experienced professionals.

Rather than enrolling in a graduate program to put the payments on hold, you can choose to use a federal student loan consolidation program. After all, racking up more debt to get a graduate degree will only worsen the problem.

What is Loan Consolidation?

Loan consolidation is the practice of bundling loans together, paying off the old loans and receiving a lower interest rate. This translates into lower monthly payments. In addition, using federal student loan consolidation program makes repayment more simple because only one payment is due to one institution each month.

What Federal Student Loans Can Be Consolidated?

In short, most of them. The following federal loans can be consolidated into one package:

* Perkins loans (Stafford)
* Direct loans (Stafford)
* FFELP loans
* FISL or Federally Insured Student Loans
* LDS or Loans for Disadvantaged Students
* NSL or Nursing Student Loans
* LDS or Loans for Disadvantaged Students

What Loans Cannot Be Consolidated?

Any loan that is not federal. Therefore, alternative and outside loans such as private loans and other debt instruments cannot be included.

What Can I Expect?

You can expect to bundle multiple loans into one package with one monthly payment. However, your newly consolidated loan is likely to run over a longer period of time. There is also no guarantee your interest rate will be reduced significantly or at all.

When Can I Apply for a Loan Consolidation?

When you graduate, are enrolled less than half-time or withdraw from school. You cannot consolidate while attending school. But you should plan to apply for loan consolidation at least 30 to 60 days before you want the new rate and monthly payment to come into effect.

How Much Does Student Loan Consolidation Cost?

In general, it will not cost you anything out-of-pocket. Normally, there are no fees when applying for student loan consolidation.

How Do I Get My Federal Student Loans Consolidated?

Student loan consolidation is simple, when it comes to federal loans. First gather your loan documents. Be sure to have the loan numbers, your full name and social security number on-hand when applying. Take you loan documents to a consolidation counselor and have your loans evaluated. Don’t be afraid to ask questions and tell your counselor what your priorities are such as lower monthly payments.