Student Loan Consolidation After Graduation–What Loans That Can Be Consolidated And Who Should Consolidate Student Loan Debt?

Student loan consolidation plans after graduation can be helpful for certain individuals who may have multiple student loan debts or are simply struggling under the weight of these debt obligations when multiple college loans are in place and require the attention of a college graduate. However, students need to not only understand what loans can be consolidated under which programs but there are also certain aspects of a student’s situation that may make them a better candidate for a student loan consolidation plan, while others may find that they are going to be in a more advantageous position if they continue to pay their loans separately.

According to the Federal Direct Loans program, more widely know and used eligible loans available for consolidation under a federal program are subsidized and unsubsidized Stafford Loans, Federal Perkins Loans, Direct PLUS Loans, and Direct Subsidized Loans, just to name a few. Obviously, students who have a loan that is guaranteed or serviced by the federal government can qualify for assistance through the Federal Direct Loans program, and may have options for consolidating their debts for a more affordable payment or interest rate. Also, consumers need to understand that under a federal consolidation plan, loans that are made by state or private lenders not guaranteed by the federal government will not factor into these consolidation options, so before considering a student loan consolidation plan, the types of loans that a student has need to be reviewed to see whether a consolidation is possible or helpful.

Yet, when it comes to seeking out a student loan consolidation plan, some individuals who may have multiple federal loans, as an example, could find themselves in a position where they will be in a better financial position keeping these obligations separate rather than consolidating them. As an example, students who may have multiple student loan debts with small principal amounts and affordable interest rates could implement a repayment plan that will allow them to pay off these debts faster and at lower overall costs than if they had consolidated these loans, and had to deal with a higher principle amount and more costly interest rate charges in the long run.

However, some students simply consolidate their loans as a way to get a fixed interest rate, to find more manageable payments on a month-to-month basis, or as a way to avoid missed payments and take advantage of certain repayment plans that may be helpful for their situation, like an income-based repayment option. Students who can make their monthly payments on separate debts may, again, find that they are not a good candidate for consolidation, but advisers often point out that if factors are present like missed payments, defaulting, or the simple fact that a student is under a great deal of financial pressure and could benefit from consolidating so that more affordability can be gained at the present time, a consolidation could be helpful.

It needs to be understood though, most consolidation options can come at higher overall costs and longer repayment timeframes, so students must look at their personal situation to determine whether affordability and proper repayment can be accomplished with loans that are kept separate versus a consolidation payment plan, as students need to set themselves on the path related to their personal situation that will lead to not only more affordability but a shorter repayment timeframe and lower overall costs.