Direct Student Loan Consolidation

Student loans are like a double edge sword. Without the loans you wouldn't be able to get your college education and degree. But with the loans you are often saddled with a huge mountain of debt right as you are starting out a new career which doesn't leave much money left over from the new job you got your degree for!

If you are in the position of student loans putting a strain on your budget or actually making your finances go into the red and giving your credit score a bad name, then you may want to look into consolidating your student loans into a single loan that has a lower interest rate, longer life, and lower monthly payment.

A direct student loan consolidation might be for you if you are struggling to meet your monthly obligations and have used your deferment options already. Especially if you are about to default on your loan, you should check into consolidating it to save your credit rating. A direct student loan pays off all your old individual loans and leaves you with a new loan to start all over again; it is like wiping the slate clean and giving you a fresh start.

The deferment options become available to you again with the new loan in case you ever need it again and you will usually qualify for a much lower interest rate since the consolidated loan will be for a larger amount. And when you consolidate, the old loans show up as paid on your credit report so it will help to improve your credit standing as long as you pay your new loan on time each month and it should be easier to do with a lower payment amount.

There are actually four plans to look into when it comes to repaying your student loan consolidation:

Standard repayment plan: This gives you a set monthly payment amount for a period of up to ten years.

Extended repayment plan: This plan also has a fixed payment amount each month but the life of the loan can be extended to between 12 to 30 years, depending on how much you borrow. This makes the payments automatically lowered since they are spread over such a longer period of time, however when you do this the actual total amount you repay in the end will be larger due to more years of interest.

Graduated repayment plan: This option will also allow you to stretch your payments over a longer period of 12 to 30 years. The difference is that your payments will increase every two years. This could be beneficial to you if you are just starting out in your career and not making as much money now as you will be in the future.

Income contingent repayment plan: The payment plan is designed for those with a job and family because it takes a look at your annual income and total student loan debt along with the size of your family and then comes up with a payment amount and spreads it out over a 25 year period.

If you are still a student in school when you consolidate, it is possible that you will qualify for a six month grace period before you have to start making payments. A consolidation loan will benefit those who are looking at many years of payments ahead. If your student loans are almost paid off and you are having financial trouble, you may want to look into forbearance and deferment first because if you refinance, your loans will be spread out over more years and that will increase the total amount you will have to repay.

Flunking banks out of college - CNNMoney.com

Flunking banks out of college CNNMoney.com Private banks issued far more federally backed loans, some $67 billion, in the 2009-2010 school year, compared to $30 billion issued in direct student loans ... and more »

'People get tired, worn out' as they try to obtain loan modifications - Culpeper Star Exponent

'People get tired, worn out' as they try to obtain loan modifications Culpeper Star Exponent She said she hopes people won't judge them for their decision to send their nephew and oldest son to Fork Union Military School without knowing the ... and more »

Senate should support changes in student aid - Nashua Telegraph

WISH

Senate should support changes in student aid Nashua Telegraph Banks make profit on the loans and yet are protected against default. The notion that banks have more incentive to protect against defaults than the ... College-Bound Students Get The Message During NY's Financial Aid Awareness MonthReadMedia (press release) Free presentation educates students on financial aidNorth Idaho College Sentinel all 18 news articles »

Defaults on student loans rise in Arizona - KSWT-TV

Defaults on student loans rise in Arizona KSWT-TV AP - March 7, 2010 5:04 PM ET PHOENIX (AP) - The default rate for student loans in Arizona is rising, and critics are blaming generous lending practices, ... Defaults on student loans risingAZ Central.com all 23 news articles »

University of California Campus Erupts In Riots; Student Loan Scam Drives Up ... - HoweStreet.com

University of California Campus Erupts In Riots; Student Loan Scam Drives Up ... HoweStreet.com Every year, tens of thousands of college students and graduates stop making payments on their student loans. For more than a decade, that loan-default rate ... and more »

Federal student loan plan could hurt NH agency but would free up money - Nashua Telegraph

Federal student loan plan could hurt NH agency but would free up money Nashua Telegraph Jordan believes that the loss of NHHEAF will result in a higher default rate among New Hampshire student loan borrowers. “My hope is that there would be ... and more »

Irish Take Bitter Medicine To Survive Age of Red Ink - Wall Street Journal

Irish Take Bitter Medicine To Survive Age of Red Ink Wall Street Journal The pressures are acute in the smaller members of the 16-nation euro zone, where fears of a debt default by Greece have shaken the Continent. ... and more »

For-profit Higher Ed. Moving on Non-profits Could Reap Taxpayer Funds - Going Concern (blog)

For-profit Higher Ed. Moving on Non-profits Could Reap Taxpayer Funds Going Concern (blog) It's a sweeping generalization to say default rates somehow correlate with the quality of instruction but one can assume loans are easier to pay off when ... and more »

The $555000 Student-Loan Burden - Wall Street Journal

The $555000 Student-Loan Burden Wall Street Journal She recently entered a rehabilitation agreement on her defaulted federal loans, which now carry an additional $31942 collection cost. ... and more »

10 tips for dealing with distressed hotel debt - Hotel News Now

10 tips for dealing with distressed hotel debt Hotel News Now Borrowers can learn the hard way that the identity of the lender may make all the difference in working out a defaulted loan. If the lender is a bank, ...