Consolidating Federal Student Loans

student in libraryFederal Student Loans are issued by the federal government to assist students with paying for college by covering the costs of tuition, books, study materials, living expenses, and any other costs associated with attending college. The best federal student loans act as a substantial source of financial aid with a low Annual Percentage Rate (APR), which makes the repayment process relatively easy while a minimal amount of interest accrues. Such loans help students to focus more on their studies, stay motivated, and pursue a career of their choice. The three most prominent federal student loans are Stafford loans, PLUS loans, and Perkins loans, all of which provide low-interest, low cost funding options for students and families who need money to pay for college.


Repaying your student loans is not always an easy process. If you do not have fixed-rate loans, you may encounter a period where the interest rate on your loan rises sharply; perhaps you lose your source of income, or perhaps another sort of financial emergency arises that prevents you from being able to make regular payments on your loans. If you miss a number of payments on your loan, you might be subject to legal actions, which would ruin your credit score. Defaulting on a student loan can seriously damage your credit history.

To help students avoid defaulting on student loans, the federal government supports a program to consolidate federal student loans. Consolidating federal student loans effectively takes your multiple loans and makes them into one loan with one monthly payment. This merger of loans will make repaying your debt much easier, as you only have one payment and one loan to be concerned with.  often much simpler than if you previously had two or three federal loans to pay off. Furthermore, after consolidating federal student loans, you are also entitled to a longer term for repayment and a reduced Annual Percentage Rate (APR). Usually, the repayment term varies from 10-30 years. However, this longer term does mean that you end up paying more interest as opposed to other private student loan programs.

A Final Word

Consolidating federal student loans simplifies things for the students and gives them space to breathe. If the information above sounds like it could help your finances, you might want to consider consolidating your federal student loans. To embark on the process of consolidating federal student loans, contact your school’s financial aid office and check out the Department of Education’s Loan Consolidation site to learn more about consolidating federal student loans.

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