The Top 5 Student Loan Consolidation Options

7 min read

Private Loans

Private loans are the first option if you’re looking to consolidate student loans at low rates. These options are great for people who don’t have strong credit and don’t qualify for any federal programs. You might pay slightly higher interest than you would get from a standard consolidation loan, but these private lenders make their money off of the fact that they aren’t subject to the regulations of the US Department of Education. The downside is that many private lenders charge high-interest rates; some even go over 25% annually. If you can afford to pay back debt with no problem, then these loans might be right for you. But you should be aware of how much you’re borrowing before signing on to any agreement.

Federal Programs

There are three government programs that offer federally guaranteed student loans: Direct Subsidized, Direct Unsubsidized, and FFELP (Stafford). Direct Subsidized and Direct Unsubsidized loans guarantee students will not accrue additional fees while they are enrolled in school. However, borrowers only receive a fixed amount once they graduate and leave college. FFELP loans require payments throughout the course of education, but if a borrower completes his or her program, then he or she receives a larger payment at the end.

Federal PLUS Loans

The Federal Parental Loan Program (PLUS) was created by President Johnson and signed into law in 1965. Federal PLUS loans were designed for parents who wanted to help finance their kids’ going to college. Because PLUS loans are considered private loans, interest rates are determined by the market instead of the federal government. Borrowers of PLUS loans must use them for educational purposes. Students may use these funds for tuition, room and board, books, supplies, technology, childcare expenses, and other costs associated with attending college.

State Grants & Scholarships

One of the best ways for students to save money while getting a degree is to look into state grants. There are different states that give out scholarships and grants based on need. Many schools also offer scholarships to veterans and those that attend specific types of schools. Check with your counselor’s office to find out about any special grants offered by your school.

Bankruptcy

If you want to avoid repaying your student loans, then bankruptcy may be your answer. In Chapter 13 bankruptcy, you repay your debts over time, often in equal monthly installments. You’ll file a repayment plan with your Chapter 13 trustee after consulting with a lawyer. A trustee is a court-appointed attorney who represents you.Both options require you to keep making payments until your balance reaches zero. Either way, you must consult with a lawyer before filing.

The Top 5 Student Loan Consolidation Options

Student loan consolidation is a great way to pay off student loans faster and save money while doing it. Consolidating your debt means paying a single monthly payment instead of making several payments each month. You may be able to lower your interest rate and save money by paying less than what you owe now. Whether you have private, federal, or state-based loans, they are all eligible for consolidation. However, it’s important to understand the types of financing programs offered in order to choose the right program for you. Here are the top five options for student loan consolidation.

1 Federal Direct Loan Consolidation Programs

There are two popular federal direct lending programs for student loan repayment: Income-Based Repayment and Pay As You Earn (PAYE). These programs consolidate your federal loans at the same time that you sign up to make certain monthly payments. Depending on your income level, you may qualify for these programs. If you do not meet the criteria for either option, you may want to look into consolidating your federal loans through a government agency called the U.S. Department of Education. Under the Federal Family Educational Loans Program, you may qualify for consolidation if your combined annual household gross income is $80,000 or less.

2 Private Loan Programs (Consolidatte)

If you choose to take out private student loans, you should know that they are not eligible for consolidation under any of the current loan programs. Most private lenders require borrowers to pay back their loans regardless of whether they receive a degree, get a job, or even graduate college. Even though students aren’t eligible for consolidation, you may still be able to renegotiate the terms of your existing private student loans for a cheaper monthly installment.

3 State Loan Programs (Consolidated)

Some states offer their own loan repayment programs. In addition to standard loan repayment plans that allow you to make payments based on your earnings, some states offer special programs to help low-income residents repay their student loans. To find out about specific state programs, visit our blog post here.

Non-Borrowing Financial Aid Options (Consolidate)

Including scholarships, grants, work study, and volunteer opportunities, non-borrowing financial aid options are often overlooked. There are many ways to earn money without borrowing, and if you plan ahead, you could use that money to repay your student loans. Visit our blog post here to learn how to get started.

5 Public Service Loan Forgiveness (PSLF) Programs (Consolidate/Repay)

The PSLF program was created to encourage people to enter public service careers. Any federal loan taken out prior to October 1st, 2007 is eligible for forgiveness after 120 months of payments. You must make 10 years of qualifying payments before requesting forgiveness.

The Top 5 Student Loan Consolidation Options

(For College)

Student loan debt has reached over $1 trillion dollars. However, consolidation loans provide some relief. This guide will go over the options available to students looking to consolidate their student loans.

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The Top 5 Student Loan Consolidation Options

Private Student Loans

If you have private student loans, they are not federally guaranteed and may only be paid back if you choose to make payments. You should contact your lender immediately to discuss repayment options. The interest rate, amount, and duration of these loans vary greatly.If you are unable to pay off your debt, you could lose your home or even go bankrupt.

Federal Direct Subsidized Loans

A federal direct loan is a type of government-guaranteed student loan. Undergraduate students who do not qualify for financial aid can receive these loans based on their family’s income. A subsidized loan means the government pays the interest while you are enrolled at least half time. Graduate students, parents, and caregivers who do not meet income requirements may still be able to get a government-subsidized loan. Federal unsubsidized loans are less expensive than subsidized ones, but you will have to repay them yourself if you don’t graduate or drop below half-time enrollment status.

Federal Direct Unsubsidized Loans

This type of loan does not require any financial aid or assistance from the government. You can borrow money directly from the U.S. Department of Education, and there are no restrictions on how much you can borrow. However, interest rates are higher than those of subsidized loans. Repayment begins six months after graduation or dropping below half-time enrollment, whichever comes first.

Stafford Loans

The federal Stafford loan program offers both subsidized and unsubsidized loans. There are two types of Stafford loans; direct Stafford loans and FFELP (Federal Family Educational Loan Program). Depending on whether you are an undergraduate or graduate student, the interest rates differ significantly.

Perkins Loans

Perkins loans are offered to undergraduate students who want to attend school full time. Like the Stafford loan, the interest rate varies depending on the level of need. Students with greater need generally pay much higher interest rates.

The Top 5 Student Loan Consolidation Options

Student loan consolidation is a great way for those who have several student loans to consolidate them all into one smaller monthly payment. There are different options out there, each offering their own unique advantages and disadvantages. But they all work to help borrowers pay off their debt faster and save money along the way! Here are some of the best student loan consolidation options you should know about.

Direct Consolidation Loans—These let you combine many small debts into one larger loan that you will repay over a set time period. This means you’ll be paying less interest over time. However, if any payments are missed, the entire balance could become due at once. You may not qualify for this option if you have defaulted on previous loans.

Private Loan Consolidation Loans: This works much like Direct Consolidation Loans, except instead of being offered by government institutions, they are typically offered by private companies. This makes them slightly riskier than direct consolidations because if you miss payments, the lenders can begin repossessing property (like cars or houses).

Federal Loan Consolidation: This is typically done via the Department of Education and requires a longer application process. If approved, you’ll receive a single consolidated loan that will replace several others and make one long-term payment each month. This option is ideal for those who want to lower their total amount owed but still need to pay off their current loans quickly.

Government Grants – These are free government programs designed to help students get back on track with their finances. Programs like Payday Loans allow people to borrow money based on their future income, while Perkins Loans only provide funds if you’re enrolled in school. Many of these grants require good credit scores, so applicants often need to apply early to increase chances.

A Debt Management Plan – A DMP is essentially a budgeting tool that allows you to pay off all your outstanding debts simultaneously. Instead of making multiple payments, you combine them into a single payment that covers all your balances. This is a popular option among college graduates, who use it to create enough extra cash to cover tuition costs. However, it doesn’t offer the same flexibility as other types of consolidation loan programs.

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