The Benefits of a Government Student Consolidation Loan

By Mary M. Alward

Today, tuition fees for college and university education are exorbitant. Students are accumulating a huge amount of debt because of student loans that they take out to pay for their education. By the time students graduate, their debt is overwhelming. Students who find themselves in this position when they graduate may want to consider a government student consolidation loan.

Benefits
When students graduate from college and university, they often face the task of repaying not one, but several student loans. The monthly payments on these loans may seem small, but when you add all of the amounts together, they are so high that graduates quite often cannot meet their obligations. A government student consolidation loan lowers monthly payments and offers the graduate more financial stability. These loans can usually be taken over a longer term, which reduces monthly payments even further.

Interest Rates
Government student consolidation loans are usually available at lower interest rates than other types of consolidation loans. The best time to consider applying is immediately after graduation. This provides even lower interest rates because the grace period is still in effect.

Eligibility
Any postgraduate who has more than one student loan is eligible to apply for a government student consolidation loan. To apply, the student must have more than one student loan and they all must be current. If they are in arrears, the application will be denied. The term of these loans depends on how much money is owed in total.

There are several different types of government student consolidation loans.

Parent Plus Loans
HEAL/HPSL student loans
Federal Consolidation Loans
Perkins Loans
Federal Direct Student Consolidation Loans
Stafford Loans and more

By consolidating their student loans, postgraduates will make only one monthly payment, which will cause their credit score to be better rated. The US government guarantees all federal student loans. This alleviates the need for a credit check when applying for these loans.

How to Apply
There are several ways to apply for a government student consolidation loan. It can be done by mail, fax or online. Check with the loan counselor at your educational facility for more information. It may take up to three months for your student loans to be consolidated.