Student loan consolidation refers to the decision by someone with multiple student loans from multiple sources to combine them into one, single loan. It's a decision that makes a lot of sense to a lot of people.
Most students who need help paying for college and university end up getting the financial aid they need in the form of loans, which will often come from multiple sources. If you're a student who needs help, it's entirely possible that you'll get help from both public and private sources. The first place you'll want to go is the government and the Department of Education. They review your financial situation and come up with a figure they think you deserve. After that, you'll need to cover the rest of your tuition, and that's where private sources come in to play.
If you're considering consolidating your student loans, it's important to remember that not all loans can be consolidated. According to the Department of Education, the following types of loans are eligible:
- Direct Subsidized and Unsubsidized Loans
- Federal Subsidized and Unsubsidized Federal Stafford Loans
- Direct PLUS Loans and Federal PLUS Loans
- Direct Consolidation Loans and Federal Consolidation Loans
- Guaranteed Student Loans
- Federal Insured Student Loans
- Supplemental Loans for Students
- Auxiliary Loans to Assist Students
- Federal Perkins Loans
- National Direct Student Loans
- National Defense Student Loans
- Health Education Assistance Loans
- Health Professions Student Loans
- Loans for Disadvantaged Students
- Nursing Student Loans
The following loans are, according to the Department of Education, ineligible for consolidation:
- Loans made by a state or private lender and not guaranteed by the federal government
- Primary Care Loans
- Law Access Loans
- Medical Assist Loans
- PLATO Loans
So, before you apply for your student loan consolidation loan, make sure you know what you can and cannot do. The good news is that consolidation loans help millions of Americans save money every year.
