Federal direct consolidation !
The Higher Education Act (HEA) provides for a loan consolidation program under both the Federal Family Education Loan (FFEL) Programs and the Direct Loan Program. Under these programs, a borrower’s loans are paid off and a new consolidation loan is created. These programs simplify loan repayment by combining several types of Federal education loans (that may have different terms and repayment schedules or may have been made by different lenders) into one new loan. The interest rate may be lower than on one or more of the underlying loans. In addition, the monthly payment amount on a consolidation loan is usually lower and the amount of time to repay may be extended beyond what was available in the separate loan programs. These features should result in more manageable debt and should make borrowers less prone to default.
College Student Loan Consolidation Interest Rates
The interest rates for federal student loan consolidations are based on the weighted average of student loan interest rates. All Federal Stafford loans disbursed between July 1, 2006 and June 30, 2008 have an interest rate of 6.8%*. Subsidized Stafford loans disbursed between July 1, 2008 and July 1, 2009 have a rate of 6.0%, and Subsidized Stafford loans disbursed after July 1, 2009 have a rate of 5.6%. Currently, Unsubsidized Stafford loans remain at 6.8%.
Federal student loans will have different rates depending on type and disbursement dates. For example, rates for Stafford loan disbursed before July 1, 2006 will remain variable until consolidated.
* Currently, the interest rates for Federal loans disbursed before July 1, 2006 are at an all time low:
Stafford Loan (in school/grace period): 1.88%
Stafford Loan (in repayment): 2.48%
Federal student loans will have different rates depending on type and disbursement dates. For example, rates for Stafford loan disbursed before July 1, 2006 will remain variable until consolidated.
* Currently, the interest rates for Federal loans disbursed before July 1, 2006 are at an all time low:
Stafford Loan (in school/grace period): 1.88%
Stafford Loan (in repayment): 2.48%
Federal PLUS loan: 3.28%
If you still have Federal loans at a variable interest rate now is the time to consolidate. When you consolidate Federal loans the interest rate is the weighted average of all your loans rounded up to the nearest 1/8 percent. This would result in final consolidation interest rates of:
Stafford Loan (in school/grace period): 2.0%
Stafford Loan (in repayment): 2.50%
Federal PLUS loan: 3.38%
Private Student Loan Consolidation Rates
Private student loan consolidation interest rates are variable, based on either the LIBOR (London Interbank Offered Rate) or the Prime rate, plus a margin for borrower and/or co-signer credit.
Origination fees can range between 1% and 5% depending upon your individual credit or the credit of a co-signer. Any fees that associated with the loan are capitalized (added to the loan) typically at the time repayment begins, which increases the amount borrowed but avoids any out-of-pocket expenses at loan closing.
Financial Solutions for Students and Parents
NextStudent, one of the country’s premier providers of student loans, is dedicated to helping students and their families find affordable ways to pay for college, student needs, and life after college. We offer a wide range of education finance products and services, including a free online scholarship search engine, links to a network of student loan providers, and extensive information on federally guaranteed parent and student loans, private student loans, and student loan consolidation programs.
Besides access to scholarships and college loans, we also offer options for credit cards, student credit cards, prepaid college credit cards, student health insurance, and short-term health insurance for recent grads.
Student Loan Consolidation
How much can you save each month?
If you consolidate student loans right now, you could save hundreds of dollars a month. Here's a quick chart showing how much you could save on your monthly payments:
Total Loans | Current Payment | After Consolidation | Monthly Savings |
|---|---|---|---|
| $30,000.00 | $342.48 | $227.22 | $115.26! |
| $40,000.00 | $456.64 | $275.10 | $181.53! |
| $50,000.00 | $570.80 | $343.88 | $226.92! |
| $75,000.00 | $856.20 | $483.96 | $372.24! |
| $100,000.00 | $1,141.59 | $645.28 | $496.32! |
School Loan Consolidation is a practical repayment tool that refinances your school loans into one loan, significantly reducing your monthly payment. Take a look at how much you can save each month with our student loan consolidation calculator.
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