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InsuranceToday.com For All Your Insurance Needs Federal Financial AidFederal Student Loan Consolidation Private Financial Aid Programs
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Federal student loan consolidationOne oddity in the offerings by the US Department of Education is the federal student loan consolidation program. Unlike other forms of federal student loans, federal student loan consolidation is a loan issued after the student graduates, as a means of extending the repayment term of federal student loans. While this is more expensive for students in the long term, initially it saves them money by reducing the monthly payment size, which is important for students who are unable to meet significant financial obligations immediately after graduation. For example, a student with US$25,000 in federal student loans at 3.375% would have an estimated monthly payment of US$245 for 10 years before consolidation, and an estimated monthly payment of US$143 over 20 years after consolidating. Federal consolidation loans retain the privileges of regular federal student loans, such as the ability to suspend payment for up to 36 months due to economic hardship, or defer payment if the student goes back to school. Application Procedure: Fill out a Federal Consolidation Master Promissory Note request (http://www.StudentLoanConsolidator.com) Repayment: Repayment terms are governed by the total amount owed. Typically, this is:
Repayment rates are based on the existing student loan rates at time of application. Students can determine their loan information using the US Department of Education National Student Loan Database System (NSLDS) (http://www.NSLDS.ed.gov/). Federal Student loan rates are set each July for the following year.
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