Student Loan Debt Consolidation

- An Overview of Student Loan Debt Consolidation -

A student loan debt consolidation loan allows you to combine your federal student loans into a single loan with one monthly payment. The repayments of a student loan debt consolidation loan can be significantly lower than the payment required under the standard 10-year repayment option. Under the Federal Family Education Loan (FFEL) Program, banks, secondary markets, credit unions, and other lenders provide the student loan debt consolidation loan. Under the William D. Ford Federal Direct Loan (Direct Loan) Program, the federal government provides the student loan debt consolidation loan.

Most federal education loans are eligible for inclusion in a student loan debt consolidation loan, including subsidized and unsubsidized Direct and FFEL Stafford Loans, SLS, Federal Perkins Loans, Federal Nursing Loans, and Health Education Assistance Loans. However, private education loans are not eligible for inclusion in a student loan debt consolidation loan.

To find out which loans can be included in a student loan debt consolidation loan contact the Direct Loan Origination Center's Consolidation Department if you're applying for a direct student loan debt consolidation loan. Contact a participating FFEL lender if you're applying for a FFEL student loan debt consolidation loan.

It is worth noting that you are still eligible for a student loan debt consolidation loan after you graduate, leave school, or drop below half-time enrollment. You can also get a student loan debt consolidation loan while you're in school. You must, however, be attending at least half time and have at least one Direct Loan or FFEL in an 'in-school period' which generally means that you have been continuously enrolled at least half time since the loan was disbursed. There are a number of conditions that need to be met for you to qualify for a student loan debt consolidation loan, especially if you are delinquent or in default and your loan holder will be able to give you all the necessary information.

If the same holder holds all the FFEL loans you want to consolidate, you must obtain the student loan debt consolidation loan from that holder, unless you haven't been able to get a loan with income-sensitive repayment terms that are acceptable to you. To be eligible for a William D. Ford direct student loan debt consolidation loan, you must have either a direct Stafford subsidized or unsubsidized loan that will be included in the student loan debt consolidation loan or have at least one Federal Family Education Loan (FFEL) program Stafford subsidized or unsubsidized loan.

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About the author:

Angela Rogers is the editor for www.debt-helper.info
  - - -  Your guide to debt help and debt consolidation.

- Student Loan Debt Consolidation Details -

For American students, the U.S. Government came up with a plan that can help a student manage their student loan debt.  The plan they came up with is called a Federal Direct Consolidation Loan.  It doesn't matter if you're a recent graduate student, well into your career already, still at school, or in your grace period for repayment of a student loan.  For any of those student categories, a Federal debt consolidation loan may be applied for.

Students successful in their application for a federal debt consolidation loan may reduce the amount they need to repay each month, or increase the time that they have to pay off their current debt.

How Does a Federal Debt Consolidation Loan Help a Student Pay Off Their Debt?

For a student who has student loans under several different programs, bringing them all together under one direct Federal Debt Consolidation Loan can make your debts easier to manage.  By combining all of your loans into one, you're only responsible for making one payment to one lender - the U.S. Government.  To help make the option of debt consolidation more attractive, there are four flexible payment plans available, including two which take income and/or income expectations into account.

The Federal Debt Consolidation Loan is Available to Help you Manage your Student Debt.

Student loan debt is not something that you want dragging at your feet like a ball and chain.  It provides a good opportunity for students to learn to manage their finances.  Even if you are still at school, it is a good time to learn to manage your debt.  That will hold you in good stead as a consumer long into the future.  For example, if you choose to consolidate all your student debts into one before you leave school, you can lock in an interest rate as much as .6% lower than if you attempt to refinance later, after you leave and are no longer a student.

For more on how a Federal Direct Consolidation Loan can help lower your repayments, and manage your student debt, you can visit the Department of Education's web site.  Once there, you can make use of their online debt calculator at www.loanconsolidation.ed.gov to estimate your projected monthly payment under the various plans.

Can a Federal Direct Consolidation Loan help you manage your debt?

There could be reasons why debt consolidation is not the best solution for any particular student.  If a student is close to the end of their repayment term, for example, it may not be worth the work to consolidate.  Prolonging the life of your loan is likely to increase the amount you pay overall.  If you can afford the higher monthly payments to pay off the debt sooner, you can ultimately save money by doing so.

If, however, you are sure that a Federal Direct Consolidation Loan will be to your benefit, you still need to be eligible for the program.  The eligibility guidelines can be found at www.loanconsolidation.ed.gov/borrower/beligible.shtml  In addition, the list of loans that are eligible for consolidation can be viewed at: www.loanconsolidation.ed.gov/borrower/bloans.shtml

Which Federal Student Loan Consolidation Plan is the most suitable for you?

Here are the 4 loan consolidation plans that are available to choose from:

Standard: The standard repayment plan is fixed-rate, and runs for a maximum of 10 years.  The minimum monthly payment is $50.

Extended Repayment Plan: this is a fixed rate plan, with payments extending over the course of 12-30 years.  Payments are a minimum of $50, and the life of the loan is dependent on the total amount of the debt.

Graduated Repayment Plan: Under the graduated plan, payments start low and increase, generally every two years.  The length of the repayment period can vary from 12 right up to 30 years.

Income Contingent Repayment Plan: The monthly payment is based on a borrower's annual adjusted gross income, family size and the total amount of direct loans.

If your student loan debt is out of control, or could be better managed, it is worth paying a visit to: loanconsolidation.ed.gov to see how the federal government can help you with a debt consolidation loan for students.

About the Author:

This student loan consolidation article was written by Roy Thomsitt,
owner of www.eliminate-credit-card-debt-now.com

For American students, the U.S. Government came up with a plan that can help a student manage their student loan debt.  The plan they came up with is called a Federal Direct Consolidation Loan.  It doesn't matter if you're a recent graduate student, well into your career already, still at school, or in your grace period for repayment of a student loan.  For any of those student categories, a Federal debt consolidation loan may be applied for.