Student Loan Consolidation Options
Following your graduation, you may find yourself with many types of student loan debt that you acquired along the way. The types of debt you have determine the consolidation options available to you. Some are obviously more beneficial than others which is why it is critical that you pay close attention to the types of debt you lock yourselves into during your education. The two primary consolidation options which we discuss below are federal student loan consolidation which lets you consolidate most subsidized and unsubsidized federal loans (such as your Stafford, Parent PLUS, HEAL/HPSL, Perkins, and all Federal FFELP and Federal Direct Loans) and private student loan consolidation which allows you to refinance all non-federal, education related debt. We will also look at some other consolidation options such as income-based student loan repayment and service based debt mitigation.
Federal Student Loan Consolidation
Federal student loan consolidation is a fixed-rate refinancing program that combines all your existing federal student loans into a new loan. Terms range from 10-30 years. The interest you pay is determined by a formula set by the federal government based on average of the loans you currently have and are applicable at the time you apply for consolidation. It also depends on the types of loans you have and when you took them out. The calculated rate is typically rounded up to the nearest 0.125%, and capped at 8.25%. You can calculate your potential consolidation rate using FinAid's Financial Calculator.
