Benefits of consolidating school loans

02 Sep

But if you switched majors, transferred colleges, or went on to graduate school, you may be among the 19% that owe ,000 and above, or the 5.6% who owe more than 0,000.

Chances are if you’re dealing with student loan debt, you’re not just dealing with one loan. And if you couldn’t cover the costs with federal loans, you very well may have turned to a private lender, such as a bank or other lending institution (e.g., Sallie Mae) to fund the rest of your expenses.

As part of the process, you’ll need to provide details about your existing federal student loans, and choose a federal loan servicer and repayment plan for your new consolidation loan.

Applying for consolidation takes most borrowers less than 30 minutes, according to the Federal Student Aid website.Here’s how: When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.If you choose an income-driven plan, you’ll be asked to provide income information on the application by granting access to your IRS tax information.You can opt out, but you’ll have to submit a copy of your most recent federal tax return directly to your loan servicer after you finish the consolidation application.