Confused About Consolidation?
Get the Facts Before You Decide
Student loan consolidation: what is it and should you do it? If you learn only one thing from contemporary communications and mass media it’s this: just because it reads as if it’s the “of course” thing to do, doesn’t make it sensible or right for you.
We’re talking about student loan consolidation, a topic that permeates any discussion even remotely related to the high cost of financing a college education.
There is no shortage of FAQs and information on consolidating student loans. Information is available through student loan lenders, private banks, and state guaranty agencies. But be cautious; potentially bad misinformation is also out there.
Access to Unbiased Information and Responsible Advice
Large student loan lenders such as Sallie Mae and Chase provide informational articles and student debt management resources that are separate from their sales pitch. For the most part these companies are extremely reliable, experienced and in the business to offer unadulterated guidance.
States often provide a student loan resource that is intended to offer a slew of resources; aimed at every educational category from K-12 to college grads. The information tailored to college students will typically be general, but worthwhile.
A couple of examples include the College Foundation of North Carolina and NELA, the guaranty agency for Washington and Idaho. Check into your state’s online resources.
A good general source for basic advice is the Borrower Information section of the U.S. government’s Direct Loan program. If you are unsure, especially in regards to your federal loans, whether you are a candidate for consolidation, the comprehensive Q&A may help you make up your mind. Use the online calculator to figure the interest rates on your loans.
You can stay abreast of big interest rate changes that could deeply affect your loans, by keeping current with top financial headlines. Every few years it seems big changes occur, often based on government budget measures. The New York Times online offers a free, basic subscription service. The NYT Education section will always provide the latest news, as will CNN Education.
General Self-Exam
The initial impulse to consider consolidating your student loans generally indicates a problem already afoot. Maybe your multiple monthly payments are increasingly difficult to swing, or your interest rates seem high. There are some basic factors to consider:
- Are you a new grad?
- Are you within your grace period or have you entered repayment?
- Have you defaulted on your loans?
- How far through loan repayment are you?
- Are you willing to agree to an extended repayment term in order to get lower monthly payments?
- Are you willing to pay more, in the end, for your college education?
- How many loans do you have? Federal and private?
- From how many lenders?
Resource #1: Your Lender
Definitely do not overlook the resource for loan consolidation right at your fingertips: your student loan lender. A customer service rep or account manager has immediate access your account. He or she can offer you reasonable feedback and advice regarding your current repayment situation and the outlook down the road. Your student loan lender/provider is in place to service your financial needs: use that service wisely and ask questions.
