5 Killer Advantages Of The Federal Student Loan Consolidation

First, never consolidate federal debts together with private ones. Because the federal ones have better terms, than the private ones, you will most probably lose more than to win.

When a grad thinks the federal student debt consolidation he has to go through both the cons and pros. He may win something and lose something. The decision is wise only, if the gained things are bigger than the lost things for the whole running time.

1. The Special Benefits Of The Federal Loans.

As already mentioned the interest rate is fixed, which makes the planning easy. The Federal Government provides free insurance, which means the borrowers loans are cancelled if he dies or is disabled. If he studies at least half time, the loans are allowed to defer. If a student is a half time student, the lender will add interests on two loan types, unsubsidized Stafford and Grad Plus loans.

2. The Income Sensitive Payments.

If the grad goes into the low paid job or public service he can pick the monthly payments, which is based on his ability to pay, i.e. tied with the monthly income and not following the fixed income plan. Those students, who will take their loans after 2014 have an opportunity to limit the payments to 10 percentages from their incomes.

3. The Federal Student Debt Consolidation.

A grad has to do the federal student debt consolidation directly with the government. Then a borrower has to fill in the application, which enables the Department of Education to get the tax filings to verufy income.

4. The Income Based Repayment.

Those grads, who will consolidate their loans with the federal government has to apply the income based repayment. They have to continue to follow the repayment schedule. They have a possibility to get at least part of their debts forgiven.

5 Advantages Of The Public Servants.

They have a possibility to get rid of the remaining federal student loans after 10 years. Those, who suffer from the low incomes have a possibility to get rid of their remaining student loans after 25 years. After 2014 this time will be dropped down to 20 years.

There is still one advantage with the federal student loan consolidation. The government does not charge a grad anything extra, if he will pay the loans earlier. As a reader can notice from this short article, the federal student loan consolidation is full of details, both pros and cons, and this is the reason, why a grad makes it wise if he or she will meet the counselor before signing anything.