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Student Loan Consolidation

Many graduates are turning to student loan consolidation to eliminate multiple payments. While consolidating multiple loans can reduce monthly payments and interest rates, it is important to conduct research to determine if consolidation is the best financial decision.

Many factors must be considered with college loan consolidation. Both subsidized and unsubsidized college loans can be consolidated. However, under federal law lenders are required to consolidate these types of student loans individually in order to monitor payment transactions. College graduates can use the same lender and submit one payment for both loans.

Students must meet lending requirements in order to consolidate federal student loans. Students must have two or more government college loans and be current on all loan payments. College graduates with federal education loans must wait a minimum of six months and pay three full loan payments before applying for a consolidation loan.

Graduates with SallieMae loans will need to apply with conventional banks to obtain college loan consolidation. In recent months, Congress has made multiple legislative cuts which have caused SallieMae to suspend their participation in the federal loan consolidation program.

SallieMae does offer a variety of student loan repayment plans including: extended loan repayment, graduated repayment, income-sensitive and income-based repayment. Students with SallieMae educational loans should consult with a repayment specialist. Details of student loan payment programs are available at

Student loan debt consolidation is similar to mortgage refinancing in that multiple student or parent loans are combined into one loan through one lender. Most private and federal loans can be consolidated including Stafford, Perkins, Health Professional Student Loans, Guaranteed Student Loans and Direct Loans.

A loan consolidation program has been established for post graduates with Direct Loans through The primary benefit of this government guaranteed student loan consolidation program is students are exempt from undergoing credit checks; making this program attractive to graduates with little to no credit or those with low FICO scores.

Private college loans and federal student loans should be consolidated through the same lender when possible. Private student loans can include money borrowed from parents, banks, credit unions and credit card companies, such as Discover. Private college lending is often subjected to higher interest rates than federal loans, so consolidation can substantially reduce monthly payments.

Students should also investigate alternatives to loan consolidation including college loan forbearance programs, tuition deferment and student loan forgiveness. Several programs offer debt forgiveness to students who obtain degrees in public service fields including nurses, teachers and lawyers. Students with extreme economic hardships may also qualify for student loan forgiveness. A list of student loan consolidation alternatives are presented at

Feel free to browse our student loan consolidation article library to learn more about available options and to locate available resources. When necessary, consult with a financial advisor to determine which finance options are best suited for your needs.