Living with two or more student loans can be really challenging, especially for those trying to establish a career or start a family. Fortunately, there is a potential solution to this problem in the form of student loan consolidation.
With loan consolidation, one new combined loan takes the place of your existing loans. The big advantage to this is that it can lower your payments and lower your interest rates. It can also make your life much simpler because you will only have one payment and one lender to deal with.
There is a also ways that you can erase your student loan debt by serving your country and your community. Public Student Loan Forgiveness programs (or PSLFs) allow individuals to get out of some student loans by working for the government or certain non-profit organizations.
The good news is – you can qualify for PSLFs by working at any local, state or federal government job. The bad news is that not every student loan is covered by the program. You will also have to wait 10 years and make 120 qualifying loan payments to achieve total debt forgiveness, so it is not an immediate solution.
With Private Student Loan Consolidation, a private lender pays off your existing loans and issues you a new obligation. In contrast, Direct Student Loan Consolidation is actually a federal-lending program created by The Reauthorization of Higher Education Act of 1992.
President Obama greatly expanded direct student consolidation through the Federal Direct Student Loan (also known as the Obama Student Loan Forgiveness) Program in 2010. This program offers significant advantages for people who are struggling with student loans.
Unfortunately, only certain student loans qualify for PSLF. This means the program may not forgive all of your student loan debt. Under the current program only direct-subsidized, direct-consolidated, direct unsubsidized, Direct PLUS and Stafford loans qualify.
Private student loans and loans that are in default will not qualify for PSLF. If you qualify for PSLF but your loans do not, you will have to consolidate them before applying. Fortunately, it is possible to convert other kinds of student loans to obligations that are eligible for PSLF by taking advantage of the Direct Loan Consolidation program.
You must meet the conditions outlined by the U.S. Department of Education.
These conditions are:
That depends on the amount of the loan, your other student loans and the repayment plan you choose. If you have a lot of debt it can take up to 30 years to repay the loan.
Yes. Anybody can contact the Department of Education directly through its website and apply for any of the federal consolidation programs on there.
It is often easier and faster to work through private companies because navigating the federal bureaucracy can be difficult. Many borrowers turn to private companies because they got confused and frustrated by the Department of Education’s system.
Student Loan Advisors understand the process and know how to get the paperwork processed fast. Many borrowers that apply themselves end up waiting for months just to get an answer from the Department.
Not at all, anybody can apply directly on their own or with the help of a Student Loan counselors.
Yes. A PLUS is a federal student loan so it can be added to consolidation plans. PLUS loans cover education expenses not covered by regular financial aid, such as housing or textbooks.