Is A Student Loan Debt Consolidation Loan Right For You? 

The U.S. Government offers a plan that can help you manage your student loan debt with a Federal Direct Consolidation Loan. Whether you're still in school, a recent graduate in your grace period or midway into your career a debt consolidation loan from the federal government may lessen the amount you need to repay, or increase the time that you have to retire your current debt.

How can a federal debt consolidation loan help you pay off your debt? 

If you have student loans under several different programs, bringing them all together under one Direct Consolidation Loan can make your debts easier to manage. By combining all of your loans into one, you're only responsible for making one payment to one lender - the U.S. Government. To help make the option of debt consolidation more attractive, there are four flexible payment plans available, including two that take your income and/or income expectations into account.  

A Direct Consolidation Loan is available to help manage your student loan debt even if you're still in school or in your grace period. If you choose to consolidate all your debts into one before you finish school, you can lock in an interest rate that as much as .6% lower than if you attempt to refinance later. 

For a better idea of how a Federal Direct Consolidation Loan can help lower your payment and help manage your debt, you can visit the Department of Education's web site and make use of their online debt calculator at https://loanconsolidation.ed.gov to estimate your projected monthly payment under the various plans. 

Can a Federal Direct Consolidation Loan help you manage your debt? 

There may be reasons why debt consolidation is not the right solution for you. If you're close to the end of your repayment term, for instance, it may not be worth the work to consolidate. Extending the life of your loan is likely to increase the amount you pay overall. If you can afford the higher monthly payments to pay it off sooner, you can save money in the long run.

If you're certain that a Federal Direct Consolidation Loan will be to your benefit, you still need to be eligible for the program. The eligibility guidelines can be found at:           www.loanconsolidation.ed.gov/borrower/beligible.shtml  

In addition, the list of loans that are eligible for consolidation can be found here:  www.loanconsolidation.ed.gov.borrower/bloans.shtml 

Which debt consolidation plan is the best one for you? 

Standard: The standard repayment plan is fixed-rate that runs for a maximum of ten years. The minimum payment is $50 monthly. 

Extended Repayment Plan: A fixed rate plan with payments extending over the course of 12-30 years. Payments are a minimum of $50, and the life of the loan is dependent on the total amount of the debt. 

Graduated Repayment Plan: Under the graduated plan, payments start low and increase, generally every two years. The length of the repayment period varies from 12 to 30 years.

Income Contingent Repayment Plan: The monthly payment is based on a borrower's annual adjusted gross income, family size and the total amount of direct loans. 

If your student loan debt is out of control, or if you just want to manage it more easily, visit www.loanconsolidation.ed.gov to see how the federal government can help you with a direct consolidation loan.