Consolidating Federal Student Loans

students loans

It is an unfortunate fact that few can afford college without taking out federal student loans, which can be costly and take years to repay. With increasing college tuition costs over the years, these federal student loans are growing in amount, and so it is important to consider consolidating your federal student loans after you graduate, and know how to handle your debt when you enter the workforce. There is much you can do to educate yourself.

The first step is to compare the differences between private loans and federal student loans. Federal student loans often come with more advantages, such as the fact that interest paid against federal student loans is tax deductible.

student loan consolidationAnother benefit is that federal student loans can be forgiven or put on hold should you end up working for the government, or going back to school to become a special education teacher. Yet another benefit is that payments can be deferred on a federal student loan if you decide to go back to school for further education.

Private loans do not offer as many benefits as federal student loans, although they can still be consolidated. Private student loans are the same as regular loans, requiring you to make your payments responsibly as you would any other debt. If you decide to consolidate your student loans, make sure you do not combine federal and private loans together. If you do so, you will lose out on the benefits of the federal student loans, such as deferment for further education. Make sure they are consolidated separately.

To find out if you are eligible for consolidating federal student loans, you must first no longer be enrolled in school, or if you have enrolled in less than half time in classes. You must still be actively paying off the loan, or still inside the grace period, and you must not be delinquent. Be sure to research on the Internet for more information before you consider federal student loan consolidation.

When you have what information you need, consider that consolidating your loans may help you pay them off quicker, not suffer from crippling interest, or find yourself burdened in decades of debt like so many others. Starting off in the real world is difficult, and making sure your federal student loans are properly handled is the best start you can make.

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