Consolidating stafford and perkins loans

The National Student Loan Data System gives students a rundown of each federal loan by type and date disbursed.Most borrowers have a mix of subsidized and unsubsidized Stafford loans.Interest rates on these varied over the years, so check with your loan servicer - the one who sends the statements each month - to find out the rate on each loan and whether it is fixed.The interest rate on a consolidation loan is based on the average rate of all loans being consolidated.

Federal student loan borrowers have the option of consolidating their loans via the Direct Consolidation Loan program offered by the U. That loan is then serviced by the servicer of your choosing – of which Nelnet is one!

But that shouldn't be the sole reason graduates combine their loans, says Mayotte of American Student Assistance."If that's the only reason and you're someone who can keep track, it's not the best solution," she says.

"There are other ways to make it easier, such as automatic debit."Borrowers who are struggling to make their payments could see immediate relief through consolidation, but they will still end up paying more, Mayotte says."It combines the debt and extends the term and therefore lowers the payment," she explains, adding that consolidation might be a smart move for students at risk of defaulting, but that it's not for everyone.

Consolidating student loans can be tricky, and several factors need to be taken into consideration when making your decisions.

But if you decide that the benefits of consolidation outweigh the drawbacks, you can find a way to make it work, whether you have federal or private loans.

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If borrowers combine low interest rate loans with those that have a higher rate, they could wind up paying more interest over time, says Deanne Loonin, director of the Student Loan Borrower Assistance program at the National Consumer Law Center."It plays out different ways for different people," Loonin says.

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