Here is a punchlist of what you’ll want in front of you when you sit down to consolidate your federal loans, and what choices you will need to make.

1. 4-digit FAFSA pin number

2. Loan details such as servicer, disbursement date(s), and current amount owed

3. Know which loans you want to consolidate and which you don’t

4. You will have multiple repayment plans to select from which include standard, graduate, extended, income-contingent or income sensitive, and income-based

Keep in mind if you are enrolled in school half-time or greater as defined by the school you are not eligible for consolidation at this time. You will need to wait until you fall below half time status or graduate.

If you have other debt you need to consolidate such as credit cards, personal loans, utility bills, and cell phone bills get a free debt consultation quote today.

For someone like me who attended a community college before continuing on to a state school it is not really necessary. But for someone who has attended several different universities and colleges, taken some company sponsored seminars, and has had a number of informal learning experiences consolidating your academic records may be worthwhile.

The Excelsior College Credit Bank is an evaluation and transcript service for people who wish to consolidate their academic records, perhaps adding credit for nonacademic career and learning experiences. All education is then listed on a widely accepted transcript to be submitted were directed. There is a $200 set up fee and a $25 deposit fee each time you make a new education deposit.

As most of you already know consolidation is designed to minimize your monthly payment by extending out your loan term, but that also has an adverse effect.  The extension of time also adds to your total repayment amount.  So basically if you can afford your payments now it may not be a bad thing to keep the statues quo.  However, the winds of change are ushering in a new reality that may hurt student borrowers.

Beginning July 1, the majority of families who hold federal Stafford, Grad PLUS or Parent PLUS loans will receive notices that their loans have been bought by the Department of Education, which may just mean the termination of your sweet benefits.

Before the Department of Education started buying loans under ECASLA (Ensuring Continued Access to Student Loans Act) in 2007, lenders offered certain discounts to borrowers to entice them to consolidate with their organization, but those discounts get dissolved when your loan changes zip codes and ends up with the DOE.

My friend Tannaz was offered a .50 ACH discount a few years ago by her lender while my buddy Mark was offered a 2 percent discount off his remaining principal balance after making 36 consecutive ontime payments. But when ECASLA took effect, lenders who wanted their loans to be purchased by the Department of Education had to stop offering almost all of those incentives.

If you listen closely you can hear the sound of the free market crumbling.  Hold onto something solid - that wind of change is about to hit Tropical Storm status.

The rate decrease will not effect everyone however. Only those who hold federal loans with varialble interest rates are doing a little dance today. If you have fixed interest rates, and many do, you are out of luck.

The rate decreases effect those who secured federal loans PRIOR to July 1, 2006. After that date a fixed model was put into place. Of course if you had loans from prior to July 1 2006 and already consolidated you are also out of luck as you inherited a fixed interest rate at that time.

So what have the rates fallen to? Drum roll please…

Stafford In Grace rate: 2% (down from 3.61%)

Stafford In Repayment rate: 2.5% (down from 4.21%)

Parent Plus Loan rate: 3.38% (down from 5.01%)

Start your application for federal loan consolidation.

If you have other debt you need to consolidate such as credit cards, personal loans, utility bills, and cell phone bills get a free debt consultation quote today.

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In addition to federal and private student loan debt man also carry credit card debt, department stores balances, have medical bills, legal fees, personal loans, and may already have a loan or two in collections. That’s why after you consolidate your students loans you may want to consider consolidating any and all remaining debt into one easy payment. It’s conveinent and more affordable.

Get your free consultation from a debt expert at StudentPlatinum today!

Federal: If you have a federally consolidated loan the rate will never exceed 8.25%. The vast majority of students fall well beneath this 8.25% threshold however. Your consolidated interest rate is a fixed rate based on the weighted average of the interest rates on all the loans you consolidate, rounded up to the nearest one-eighth of 1 percent. The average rate these days is around 6-6.8%.

Private: Private loan consolidations vary from lender to lender, but generally don’t have a cap in order to protect themselves from the fluctuating market. Ask your consolidating lender for more details.

- 12 month Economic hardship

- 12 month temporary disability

- Up to 36 months for all active-duty military personnel

- Up to 48 months for in school deferment

- Up to 48 months for medical/dental residents

The attractive benefit packages left when all those companies offering consolidation left the market due to the recession. When several companies were in the business of consolidating federal and private loans it was common to hear a borrower receiving a 1% discount after 24 on time payments and a .50 ACH discount on top of that. Now, .25 ACH is basically all that’s available, at least on the federal side.

The rates and benefit plans available to you are all linked to timing. If you graduated in the late 90’s your federal interest rates were consolidated at around 8%. In 2004-05 you were in the 3.5% range, with benefit packages taking you well under 3%. Today many students are stuck around 6-6.8%.

If you have older brothers and/or sisters who graduated a few years ago they will probably tell you what a wonderful rate they got. They are not lying. They just happened to be in the right place at the right time.

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Consolidating private loans may cost you anywhere from 1-5% of your total loan volume. Generally speaking the lender will roll that amount into your outstanding principle balance.

Neither one has an out of pocket expense at the time of consolidating, but your private loan volume with increase. You just need to decide if the loan term and interest rate provided warrant the 1-5% fee you will be charged.

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