Government Student Loan Consolidation

Government Student Loan Consolidation

by Archana Sarat

The cost of education is always on the rise. To enable students to cope up with this upward trend and continue with there higher education they are offered various study loan schemes. More and more students are availing these study loans to pursue with their goals. Government Student Loan Consolidation scheme offers various options to reduce the monetary responsibility of students under certain circumstances. Students who availed loans under the Federal Students Loan scheme are eligible for this Consolidation. They are required to meet certain conditions for availing this facility. The number of loans availed under the Federal student loan scheme should be more than one. Where there is only one loan consolidation does not arise. The student should have either paid the monthly installments at least for 3months or is in the 6 months grace period after post graduation. Loans can be consolidated whether subsidized or not. The consolidation will be done separately for subsidized and unsubsidized loans enabling the lenders to have an individual track of them as required under law. While the consolidation processes are different the students are required to make a single payment. Consolidation does not amount to waiver. Loans are consolidated into one, technically are the loans are repaid and a new loan is created. A valid repayment process exists. Monthly liability depends mainly on the repayment period available, loan amount and the rate of interest prevailing. Advantages of consolidation are that students are given extended time period for paying back their loans consequentially reducing their monthly commitment, it is more beneficial as it reduces the complicated procedure of tracking due dates of various loans. It is to be understood that though the monthly commitment reduces the total liability increases. Extended time frames range from 10 to 30 years. Excellent offers are available under consolidation which enables students to manage their loan liabilities and continue their studies.