Consolidate Student Loans

Written by Nicole Madison
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Each year millions of students apply their signatures to student loan applications. Attending postsecondary school requires a large investment of both time and money. Many students require some sort of financial aid to help pay for college. Most students who need financial aid for college apply for scholarships and grants. Parents often chip in as much as they can afford towards school costs, but very often students need more money than their parents and scholarships can offer. The difference is often made up by student loans.

Reasons to Consolidate Student Loans

Student loans differ from other types of financial aid in the fact that they must be repaid. Students are generally expected to begin repaying their student loans within 6 to 9 months after leaving college or postgraduate school. Loans must be repaid regardless of the reason for leaving school. Whether you have graduated or not, loans must be repaid.

Many students take out more than one loan over the course of their post secondary educations and repaying them all can be quite a challenge. Writing several different checks in varying amounts to different lenders can feel like a juggling act. Keeping up with multiple payments, while retaining enough money for living expenses can be very difficult indeed.

In the period immediately after leaving or graduating from post secondary school, students are often responsible for paying all or most of their own bills, often for the very first time. The student loan debt that was racked up while they were in school can often be overwhelmingly high and students may find their new paychecks don't stretch as far as they wish. Parents may not be financially able to help repay student loans and if they can help, certainly cannot be expected to shoulder the entire burden for their adult children.

Many individuals choose to consolidate student loans as a way of easing their student loan debt. Students also consolidate student loans to eliminate the need to make multiple loan payments each month. By consolidating they are able to write just one check instead of several. Payments on consolidated loans are typically lower and often include the benefit of lower interest rates.

Deciding to Consolidate

To be eligible to consolidate student loans your loans must be in repayment status, in a grace period, or in deferment. Your student loans generally cannot be in default, but some lenders will allow you to consolidate if you make acceptable payment arrangements to bring your loan out of default with your current lender.

Although consolidating student loans is often a good financial move, this is not always the case. Certain situations make it disadvantageous to consolidate. For instance, if a loan program offers loan forgiveness for working in a certain field, it makes sense to take advantage of the loan forgiveness program in lieu of consolidating the loan.

Knowledge is key when you are deciding whether or not to consolidate student loans. Like any important decision you need to take the time to thoroughly research your options. Once you decide to consolidate and sign your new loan papers, you cannot simply change your mind if you later discover you do not like the terms. Be sure to carefully research and consider all your options to ensure you are making the best possible choices for your financial health.


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