2011 Federal Student Loan Consolidation Plans–Which Graduates Benefit From Consolidating Student Loans After College?

Recent college graduates have found that meeting college loan repayment obligations on their student loan debt can be difficult if multiple loans are in place, but there are options for consolidation plans for students who have graduated and are in need of a federal student loan consolidation in 2011. While graduates typically have a grace period where they are not required to meet student loan payments, those who have multiple obligations have often found that consolidating debt can provide more affordability when it comes to meeting monthly payments as, obviously, only one payment on a consolidation loan is required each month.

While there are opportunities for students to consolidate debt through a private student loan consolidation plan, graduates who have federal loans may also take advantage of federal student loan consolidation options which could come at a lower interest rate than some private consolidation plan. Yet, financial aid counselors often point out that not all graduates will benefit from consolidating student loans after they have exited college, and for this reason, careful consideration must be made before entering into a consolidation agreement.

Graduates who may have numerous federal student loan debts that amount to a repayment obligation higher than their income allows them to meet will, obviously, be one of the groups that may be helped by consolidating student loans after college. It goes without saying, graduates who must begin repaying Federal student loan debts but run the risk of missing payments or defaulting on loans as a result of unemployment or an income that does not allow these repayment requirements to be met, may face higher costs related to consolidation, but this is seen as more beneficial than missing payments and doing damage to one’s credit score.

Yet, there are some students who do not take time to factor in overall costs if they repay their debts separately versus using a consolidation plan. Some students may be able to budget in a way that allows them to erase college loan debt separately in a timelier manner and at lower overall costs. Some students who have multiple debts have only met minimum monthly payments on all but one debt source and focused as much money as they can on either the loan with the smallest principle or the highest interest rate, and began the process of eliminating these debts one at a time.

Smaller principle amounts are easier to erase in most cases and one of the drawbacks of a consolidation plan is a longer repayment time frame which must be met and higher overall costs that can be acquired due to interest. While students who are concerned about student loan repayments can contact their lender about consolidation options, meeting payment obligation separately can, again, be more helpful and cost-efficient for some, so for this reason student loan consolidation should not be entered into lightly without proper research beforehand.