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Consolidate Student Loans

Consolidating your College Student Loans are the best way to save money on the repayment of federal or private loans you generated while in college. The best way to manage your loans and reduce your monthly payments is to lock in a low interest rate.

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... student loan for the following reasons:

  • To lower monthly payment amounts by up to 45%
  • To lock in a fixed interest rate as low as 5.3%
  • To gain an opportunity to build your credit rating
  • To make only one student loan payment each month

To qualify to consolidate your student loans, you must meet the following criteria:

  • You have graduated or will graduate within 6 months
  • Have at least $7,500 in loans
  • Never consolidated your loans before
  • Your loans are in good standing and not in default

Click here to submit your information and consolidate your student loans. A loan counselor will contact you via telephone to discuss your options and help you start the loan consolidation process.

People who have been interested in consolidating their loans have also been interested in online degrees and online classes. You can request free information from a top online college for free Click Here

Our top online colleges include American Intercontinental University, Colorado Technical University , and Florida Metropolitan University. Click here for a complete list of online colleges to choose from.

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Knock off more-expensive loans first and then concentrate resources on remaining debt is the best way to become debt free. A credit card charging 18% interest is a heavier burden than a college student loan: The highest rate on student loans currently outstanding is 8.25% (range from 3.5% and up). If student loans are your only liability, focus first on those with the highest rate. Even if your budget is tight, don't rule out investing some of your resources if you can earn a higher return than the interest rate you're paying on your loan.

The standard repayment plan for student loans calls for equal monthly payments and a ten-year payback period. If that's more than you can afford, call your lender before the grace period ends to ask about other repayment options. With the consolidated loan, the interest rate will be a weighted average of all the loans, rounded up by one-fourth of a percentage point. Variable rates for government-sponsored Stafford loans are unusually low now, so consolidating locks in an attractive rate. Once you're locked in, however, you're stuck if the Stafford rate happens to drop in the future.

When consolidating loans, start with your current lender and shop elsewhere if you don't like the terms. Most lenders will also reduce the interest rate if you pay electronically, with a further reduction of two percentage points once you make 48 consecutive on-time payments.

OTHER TACTICS. If a loan consolidation doesn't suit your needs, consider a graduated repayment plan, which starts out with monthly payments that are about 50% of those under a standard plan. Payments will gradually increase until you're paying more each month than you would under a standard plan: While the higher payments may be manageable if you expect your salary to keep pace, there's a chance you'll have difficulty qualifying for another loan, such as a mortgage, later on. And you do end up paying more in interest, especially if you take more than ten years to repay. "Once you lower the payment or increase the term, a $25,000 loan can end up costing $40,000," says Diane Saunders of Nellie Mae.

New Study on Student Loans and Consolidation
A recent study conducted by Policy Analysis for California Education (PACE) found that the first semester of college is a pivotal period in students' academic careers. The study, titled "Beyond Access: How the First Semester Matters for Community College Students' Aspirations and Persistence," followed first-time students enrolled in California community colleges aged 17 to 20 in the fall of 1998. The study, based on system data gathered over a six-year period, tracked graduation and retention rates of first-year students to arrive at its findings. The findings of the study suggest that it is most important to focus on preparing high school students for college and that simply increasing college access doesn't solve the problems faced in building a more educated population and workforce.

The study pointed out that although California has more community college students than any state, it ranks below the national average in its proportion of full-time postsecondary students who graduate with bachelor's degrees. The research data showed that 25% of first-time students entering California community colleges with high school diplomas and the desire to transfer to four-year colleges did not return for the spring 1999 semester. Two-thirds of first-time students did not return to college the following year. Out of those who did return, only four in 10 still aspired to transfer to a four-year college.

The reason for this, according to Dr. David Neumark, economics professor at the University of California-Irvine, is that "[m]any high schools, not just in California but everywhere, are failing to deliver students to college ready to learn, and that is certainly bad for those individuals and taxpayers who might not be satisfied with what they're getting. Whether it's more efficient to intervene at the community college level with remediation or more efficient to try to fix high schools, it's not entirely clear...It would be great if we could encourage people to stay in school longer." However, Neumark admitted that students' lack of preparation is a tough problem that needs to be seriously addressed.

Dr. David N. Plank, executive director of PACE, said, "If we can find ways to support successful transitions for entering students by providing more guidance and academic support, we can increase the odds that they will stay in school and complete degrees."

Federal student loan organizations call for revision of student loan reconciliation bills
Four federal student loan organizations wrote a letter to Education Committee chairmen and ranking Republican members in both houses urging them to reconsider subsidy cuts proposed in upcoming student loan reconciliation bills and to abandon their plans for a pilot student loan auction. The Consumer Bankers Association, Education Finance Council, National Council of Higher Education Loan Programs, and Student Loan Servicing Alliance signed the letter, which states that if the current bills are signed into law, "[b]orrowers will likely lose many, and in some cases all, of the borrower benefits currently offered by lenders." The bills, which have passed through the U.S. House and Senate, propose cutting more than $17 billion in subsidies to lenders and guarantors participating in the FFEL Program.

Montana senator proposes free college tuition
Senator Max Baucus (D-MT) has proposed legislation that would offer full scholarships to all high school graduates planning to major in math, engineering, science, or technology in college. As part of a new $25 billion education incentives package, the legislation, according to Baucus, will make the United States more globally competitive, especially with China and India. The bill also includes assistance for rural teachers, scholarships for future math and science teachers, and additional funding for pre-kindergarten programs. Baucus's program would apply to all universities, but in order to be eligible, students would have to work or teach in a related field for at least four years after graduation.

Schools Will No Longer Receive Paper FAFSA Forms

The Department of Education is encouraging students to complete their FAFSAs online.

Washington, DC—The U.S. Department of Education has a new plan to simplify the distribution of its Free Application for Federal Student Aid (FAFSA) form. The department recently announced that it will no longer send paper copies of the form to colleges and universities.

In the past, the department has regularly mailed millions of FAFSA forms to schools. However, as of January 2008, schools will not receive paper copies of the form. In hopes of reforming the application system, the Department of Education is now encouraging students to complete the FAFSA online.

For the 2008-2009 academic year, the Department of Education will create a PDF version of the form that students can complete and submit for processing. This will be available for students to download from several federal financial aid websites, such as After students access the form online, they will be able to complete it on the computer or by hand and then submit it by mail for processing.

According to Higher Education Washington, Inc.'s NewsLine, students may still obtain paper copies of the FAFSA by calling the Federal Student Aid Information Center (FSAIC) at its toll-free number, 800-4-FED-AID (800-433-3243). By calling this number, students can request a maximum of three paper copies of the FAFSA, which they should receive in three to seven business days.

While schools will no longer receive paper copies of the FAFSA, they will be able to access the PDF from various websites. They will also have the option to order paper copies of the FOTW Worksheet, which provides instructions to students on how to complete the online FAFSA.

Submitting a FAFSA is the first step students take when applying for any federal financial aid, such as federal loans, grants, work-study, etc. The form provides the federal and state government and colleges with information to determine the student's eligibility for financial aid.

"The government needs to continue to simplify the process of completing a FAFSA and allowing students to apply for financial aid," said EdFed loan counselor Jennifer Munson.

"Our goal at EdFed is to help students realize their dream of earning their college degree-and helping graduates and professionals manage the student loans that can result from obtaining an education," Munson added.

New Legislation Introduced to Forgive Private Student Loans upon Bankruptcy

DC—This week, legislation was introduced by Illinois Senator Dick Durbin (D) that would allow private student loans to be forgiven upon bankruptcy. Currently, neither private nor federal student loans will be discharged for a borrower who files for bankruptcy, with the rare exception of extreme hardship.

Private student loans, also known as alternative loans, offer students an option other than federal student loans, which are backed by the federal government. Private loans are borrowed through private institutions but are not administered by the Federal Family Education Loan (FFEL) Program.

While private loans can be beneficial to students who find that federal loans cannot cover all of the costs involved with obtaining an education, they can also be a financial burden to repay. This is because private loans usually have very high interest rates and fees. According to Higher Education Washington, Inc.'s NewsLine, some private loans have been reported to have variable interest rates of 15% or higher. Also, unlike federal student loans, private loans usually have higher loan limits, and there are no public regulations governing the terms and costs associated with private student loans, as there are with federal loans.

"Private student loans are incredible money-makers for loan companies, and students end up saddled with sky-high interest rates and mountains of debt," said Senator Durbin. He continued, "I don't think many 17- or 18-year-old students realize the long-term impact of their loan decisions. Some of these private student loan repayment schedules-with double-digit interest rates-can follow a student borrower from graduation to the grave."

According to a press release on the senator's website, the sector of private student loans is the fastest growing and most profitable in the student loan industry. The press release also said that in 2006, private loans accounted for around 20% of total student loan borrowing, compared to only 5% 10 years ago.

Prior to a change in 2005, the bankruptcy code allowed borrowers to discharge private student loans but not federal student loans. However, the 2005 modification prohibits private student loans from being forgiven upon bankruptcy. This provision protects the private lending industry's investments.

Senator Durbin's legislation would reverse the 2005 change to the bankruptcy law, ensuring that private student loans would again be discharged upon filing for bankruptcy. According to the senator's website, this would place private student loan lenders in the same position as all other private creditors.

Paying for college is tough, but the fact is that there are options available to any student who is serious about getting student loans and getting a college degree. There are direct student loans that can be paid back over time interest free, as well as certain attainable government student loans that are designed to help out people with less than perfect credit. Many people recognize that people with bad credit have made mistakes but it doesn’t mean that they are any less deserving of a college education, which is why many organizations including government and private agencies are willing to take a chance on people with imperfect credit. There are a number of bad credit student loans that help people with various credit histories to get viable student loans no matter their past or the type of degree that they’re studying for.

Planning for student loans in order to pursue your education is essential in today’s college environment. College has become harder than ever before to pay for and students who are looking to go back to school, whether through an online university or a physical campus, have a very tough market to compete in. Due to the rising cost of higher education it is not uncommon for students to take out a variety of loans, from Federal Student Loans such as a Stafford Loan, to private student loans that can supplement total college funding. When the cost of college is overwhelming, and scholarship money won’t cut it, student loans are the best alternative, and by researching your options you can guarantee that you’ll have the money to pay for school as well as the ability to pay them back on time and in full.