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Latest from FSA: Is Student Loan Consolidation Right for Your Students?

June 4, 2014

ConsolidateLoansBorrowers can combine multiple federal education loans into one loan with a Direct Consolidation Loan. Borrowers should be aware of both the advantages and disadvantages to consolidating loans.

Advantages of consolidating student loans:

  • Simplified payments
  • It’s free!
  • Fixed interest rate
  • Lower monthly payments

Disadvantages of consolidating student loans:

  • Possible loss of borrower benefits, such as interest rate discounts, principal rebates, or some loan cancellation benefits
  • More interest paid over time

Before borrowers consolidate their loans, they should compare their current monthly payments to what their monthly payments would be if they decided to consolidate their loans. Borrowers should also contact their loan servicer to learn more about alternative options.

Read the Department of Education’s full article here: http://www.ed.gov/blog/2014/05/is-student-loan-consolidation-right-for-you/.

 

Megan Freese, Communications Intern

Megan Freese, Communications Intern

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