Student Loan Consolidation
According to FinAid.org, approximately 65% of all four year undergraduate students 
graduate from school with some student loan debt. In fact the average student loan debt for a graduating senior is nearly $20,000. Those who elect to go to graduate school add, on average, anywhere from $27,000 to $114,000 to their undergraduate debt, depending on their course of study. Frequently, this debt will consist of a number of different loans in different amounts, with different interest rates and repayment periods.
One option for simplifying student loan repayment and locking in a low interest rate and flexible payment terms is through federal student loan consolidation. Federal student loan consolidation can cut a borrower’s monthly payment in half by combining the loan balances, extending the payment term and, possibly, reducing the borrower’s interest rate.
Who is eligible for federal student loan consolidation?
All students with two or more federal student loans are eligible for federal student loan consolidation. However, generally speaking, the borrower must be in good standing on all of her federal student loans in order to be eligible for federal student loan consolidation. If the federal student loans in question are all past the 6 month grace period, the borrower must have made on time payments in each of the three prior months.
Can I still qualify for student loan consolidation if I am in default?
If a borrower has at least one William D. Ford Federal Direct Loan, the borrower may be eligible for federal direct student loan consolidation through the U.S. Department of Education. If that is the case, the borrower may be able to consolidate all of her federal student loans even if they are currently in default status – providing that the borrower makes satisfactory repayment arrangements with the current loan holders or agrees to repay the new Direct Consolidation Loan under the Income Contingent Repayment Plan.
Am I eligible for student loan consolidation if I have private loans?
Although this section deals specifically with federal student loan consolidation, student loan consolidation is also available for private student loans. However, federal and private student loans may not be combined into a single consolidation loan.
