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Loans Just For Students- Federal Consolidation Loans

Description: Apples will be apples as oranges will be oranges. And federal consolidation loans will always be for students.

Apart from the private financial institutions, there is another type of loan consolidation program that debtors with multiple loans can opt for, and this is offered by the U.S. federal government.

The easiest federal consolidation loans to get are those that are for students. This makes sense when you consider the fact that students and people who have recently graduated are the people who usually need the most help financially. With typically little to no income, graduates are faced with student loans, medical bills, and credit card debts acquired during their schooling. The Department of Education has loan programs in place to consolidate all of a students federal education loans so that they can pay them all with one simple monthly payment.

If you are a student or recent graduate with multiple education loans, the Higher Education Act grants you the right to consolidate your loans. This act created a group of federal consolidation loans under the FFEL, or Federal Family Education Loan program and the Direct Loan Program.

Under federal consolidation loan programs, as their name implies, only federal loans qualify for consolidation. In order to get a Direct Consolidation Loan, one must already have at least one federal education loan through the FFEL or Direct Loan programs. In addition, the status of the loans must be either that they are still in their grace period, or they must be in deferment or in default.

The US Department of Educations Federal Student Aid can give out more details to help you in your consolidation efforts. Aside from FFEL loans, there is also another type of loan - the CBSL loans. Between the FFEL loans and CBSL loans, there are different loan programs, including: Federal Direct Loans, Federal Parent Loans (PLUS), Federal Direct Grad PLUS Loans, Federal Grad PLUS Loans, Federal Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLS). There are also Federally Insured Student Loans, Federal Perkins Loans, Health Professions Student Loans, and Federal Nursing Loans.

CBSL and FFEL loans can not be consolidated together, and can only be consolidated under their specific loan type. Regardless of this fact, federal consolidation loans can still save you a ton of money, cutting your monthly loan costs by as much as 40%. Terms of repayment on these loans can last as long as thirty years.

If your loans consist of both private and federal student loans, it is definitely the wisest choice to make the federal loans your top priority. Loans that were granted by the United States Department of Education can have effects on your financial state long after you have graduated. With these loans, if you default, the federal government can deduct up to 15% of your gross pay to help recover the debt, as well as taking 100% of your ta returns until the debt is repaid.

Having several federal loans at once need not stress you out. The federal government has actually provided for a solution to this stressful situation through its federal consolidation loans. Keep in mind though, that federal consolidation loans are still debts that need to be paid.

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