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.
Possibly. The U.S. Department of Education offers up to 36 months of deferment for Federal Stafford Loans, Perkins Loans and Direct Federal Stafford Loans. Many people are eligible for deferment, including:
To take advantage of this option, you will have to apply directly to the Department or check with a Student Loan Advisor.
Many private lenders offer forbearance and deferment options that will suspend or delay payments for student loan borrowers. You will have to contact the lender directly and ask what options are available for you.
Simple – get a free consultation from a Student Loan Advisor. The Advisor will discuss your situation and tell you what your options are.
Not at all.
No. The Department of Education has designed consolidation so that borrowers will retain all their benefits if it is done properly. You will still retain the benefits even if you completely pay off the loan.
Usually 60 to 90 days depending on the loan servicer. Unfortunately, there’s a lot of paperwork involved so you will have to stay on top of the process.
You can speed up the process by working with a Student Loan Advisor.