04/12/2015

You can apply to consolidate your federal student loans onStudentLoans.gov. Just select the consolidation method that suits your needs.
You may also want to contact the student loan servicer to determine which consolidation method is right for you. For instance, if you want to consolidate your federal Direct Stafford loans, you can contact the company directly.
I also recommend that you have your student loans serviced by an approved student loan consolidation service before you start the consolidation process.
Don’t forget to keep an eye on your student loan payments and keep a tally of your payments so you can stay focused on your goals, there’s a reason why experts recommend using a student loan calculator before applying for one.

Make sure you have the right type of loan. There are a few loan types that make the most sense for student loan repayment. These types of loans are known as federal subsidized loans and private loans. There are many private loans, but here is a quick breakdown of the most common ones.

Federal Loans

Federal student loans are the most common types of loan, accounting for about 72% of all student loan debt outstanding. Private Loans Private student loans account for less than 1% of the student loan market. In 2015, private student loans made up 10.6% of student loan debt outstanding. Private loans can be used to pay for tuition, living expenses and loans. Federal Perkins Loans and Federal Direct Loans Both of these types of federal student loans come with the same benefits and restrictions. These two types of federal loans are used to provide educational assistance to low income students at certain colleges or universities. Both Perkins Loans and Direct Loans are made to cover the cost of attendance for undergraduate and graduate study. However, federal Perkins Loans and Direct Loans are both available only to those who are currently attending a college or university and are attending on a full time basis for the current academic year. The maximum amount that can be borrowed for a Perkins Loan is $6,500 per year, while the maximum amount that can be borrowed for a Direct Loan is $5,500 per year. Both types of loans are issued by the U.S. Department of Education. Both types of loans are available to students with some type of financial need, while Direct Loans are only available to those with a parent’s income greater than or equal to 135% of the federal poverty level.

The current income guidelines for borrowers, in addition to being the maximum that can be borrowed, are also a maximum that is generally applied in determining how much a student may borrow and the term in which the loan will be repaid. For example, if a loan is for an amount ranging from $5,000 to $15,000, that amount is typically the maximum allowed, but the student would be permitted to borrow no more than $6,000 for a five-year period. If the student chooses to take out a larger loan, such as $15,000, the borrower may be required to pay the whole loan amount plus interest over a five-year period (in many cases, the student would have to pay the whole amount before the end of the five years). This is called loan forgiveness.

When a borrower decides to pursue repayment under the income-driven repayment plan, a repayment advisor will help the student make the decision based on the student’s ability to pay and the student’s current financial position.

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