Using Student Loan Consolidation to Reduce Education Debt

Student loan consolidation allows post graduates to refinance multiple education loans into one new loan. Borrowers can obtain a reduced rate of interest; eliminate multiple payment schedules; and lower monthly payments through consolidation financing.

In order to enter into student loan consolidation graduates must apply for a new loan through a lending institution or borrower assistance program. Consolidating college loans can be particularly helpful for medical and law school graduates who often have four or more loans.

Carrying multiple education loans requires students to manage multiple pay dates. When student loan payments become delinquent lenders can assess late fees and penalties. Additionally, past due payments are submitted to the three major credit reporting bureaus and result in credit damage and reduced fico scores.

Borrowers should take time to weigh the pros and cons of student loan consolidation. Many people find consulting with a student loan financial advisor is beneficial for making informed decisions. At minimum it is recommended to visit student loan websites such as SallieMae or Federal Student Aid or consult with each current student loan provider.

Graduates should also comparison shop lenders to determine available options and obtain the best rate of interest. Two good resources for comparing loans are and Both information portals provide links to nationwide lenders, along with current refinance and interest rates.

Consolidating student loans requires graduates to apply for a new loan to pay off outstanding education loans. Most private and federal student loans can be consolidated including: Stafford, Perkins, Professional, Health, Guaranteed and Direct loans.

Graduates holding both subsidized and unsubsidized college loans will require different financing than students with one type of loan. Lenders must track subsidized loan payments and often require borrowers to take out two loans. However, lenders will combine subsidized and unsubsidized loans, so borrowers only have one payment. Lenders appropriate funds for each type of loan.

Graduates must meet lending criteria before loan consolidation is approved. Students must be current on all loan payments and have an appropriate credit score. Additionally, students must make three full loan payments and wait at least six months before applying for student loan consolidation.

Students carrying SallieMae loans must apply for college loan consolidation through a conventional lender. In 2009, Congress made legislative cuts which caused SallieMae to stop participating in the federal loan consolidation program. Graduates can obtain consultation from a SallieMae loan consultant to determine available options. Details are available at

Students carrying education loans through Direct Loans may qualify for consolidation through the U.S. government sponsored college loan assistance program. This financing option is a preferred choice amongst graduates who have bad credit or no credit because applicants are not required to undergo a credit check. Program details are provided at

Graduates who do not qualify for student loan consolidation might qualify for alternative programs such as forbearance agreements, tuition deferment and student loan forgiveness. Depending on circumstances, graduates holding degrees in public service fields such as healthcare and law might be eligible for loan forgiveness. Students requiring loan consolidation alternatives can locate available options at

Author and investor, Simon Volkov, shares information and resources for student loan consolidation and personal money management via his website. Visitors can discover get out of debt information, along with wealth-building strategies at

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