Pros and cons of consolidating federal student loans

There are many reasons why people consider debt consolidation.

However, it is important to understand that there is no easy out when it comes to debt.

But before you head down that road, here’s what you should know.

If, like many college graduates, you have multiple student loans, you’ve probably heard the term “student loan consolidation” thrown around more than once when talking about repayment options.

Make sure you understand all of these factors, and speak with your loan servicer to determine if consolidating is right for you.

Student loan consolidation is a relatively easy concept to understand: it is the process of taking multiple student loans and combining them into one. Before consolidation, a student borrower might have multiple loans to pay back and many different loan balances to track.

You must consider all of the cons of debt consolidation before making any decisions.

Debt consolidation isn't the best solution for everyone.

You can also usually get a lower interest rate if you consolidate your loans, but you may end up paying more in the long run.

This practice has both its advantages and disadvantages, and some of these pros and cons are explored below.

Deciding whether you want to consolidate your student loans (assuming you have multiple loans and/or lenders) presents many factors to consider.

allows you to consolidate (combine) multiple federal education loans into one loan. Top Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.

The result is a single monthly payment instead of multiple payments. Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.

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