In this blog, I will discuss school loan consolidation, specifically with regards to college loan consolidation. School consolidation is a process whereby loans made by the federal government or combined with other loans with different interest rates are consolidated into smaller, or often, one monthly payment. If you have several different loan rates in your college consolidation loan, then the rate will be lower than the highest loan but higher than the lowest loan's interest rate if all loans are of equal amounts. Consolidation can also help lock in interest rates if you believe that the interest rate will be less favorable in the future. This federal consolidation was especially common years ago, and I personally remember consolidating some, but not all of my loans. Now interest rates have gone through the roof and now I truly regret not opting for consolidation of student loans. To consolidate student loans can really help with management of finances, especially for someone fresh out of school and new on the job market. As a student, I haven't had the best financial acumen and I think consolidation will end up helping me because frankly i'm always late on my payments. Luckily, my Plus loan consolidation is in order but there are other private loan consolidation considerations to consider.
A federal student loan consolidation program is MUCH more forgiving than private companies such as Sallie Mae. This makes sense, as learning and knowledge really contribute to the overall productiveness of the country. Hence, it is advantageous for the government to promulgate student loan consolidation programs. Recent Congressional legislation has even increased funding for all federal programs. Will school consolidation loans be undermined by the skyrocketing interest rate due to defaults, however? Time will only tell, but it's important to know that school loan consolidation is an option for those not wanting to juggle 5 separate payments while on their new job.
Thursday, January 3, 2008
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