Where to Find Consolidation Programs to Help Pay Off Student Loans

Knowing exactly where to start looking for consolidation programs that help you get a handle on your college student loans is the first step to getting debt free from your education loans. There are two major programs that the federal government makes available to student loan borrowers to combine debts and lower monthly repayments. And, new recent enhancements to these federal student loan consolidation programs are making them attractive options.

The benefits of consolidation are important. Only one lender and one monthly payment. Payments made by electronic payments keep your credit rating pristine by not even giving you the option to miss a bill. The new Income Contingent Repayment (ICR) plans have options which could help get your loan excused after a specified period of making timely payments.

Consolidation programs available from the federal government include:

DIRECT LOANS -- Direct consolidation by the U.S. Department of Education. Borrowers make payments directly to the department. Most favorable terms.

FFEL LOANS -- The Federal Family Education Loan (FFEL) program. While FFEL finding is subsidized and supported by the U.S. government, these are in reality made by private lenders, such as your bank or your credit union. Therefore, your FFEL consolidation is repaid directly to the private lender who originated your paperwork, unless that lender has re-sold the note. In that case, you make your payments to the new entity.

Getting a Direct or FFEL consolidation loan depends on which option you originally took out to attend college.

In either case, the repayment (equaling the total amounts you've borrowed, the interest rate on the notes, and other features not listed here that you've already agreed to) will almost certainly be structured in a similar manner.

General Requirements:
The following federal college loans are eligible for consolidation:

Subsidized and unsubsidized Direct and Federal Family Education (FFEL) Stafford Loans
Direct and FFEL PLUS Loans (aka "parent loans")
Federal Perkins Loans
Federal Nursing Loans, and
Health Education Assistance Loans.

However, you need to keep in mind that private educational loans are not eligible at this time.

A student loan borrower is free to get an FFEL consolidation during any of these three different time periods:

1. During your grace period after completing college
2. At the time you are in the repayment phase, or
3. During any qualifying periods when you have been granted a deferment or forbearance.

Therefore, as you can see, there is always an opportunity to get relief from mounting bills.

To apply you should contact the consolidation department of a participating FFEL lender for an application or more information.

For students still in school, the avenue exists that they you will still qualify for direct consolidation loans.

But beware that if you have defaulted on your student loan, there are a number of very specific requirements you must meet before you can get them consolidated to a more manageable sum. This is why it's critically important that you avoid default.