How to Consolidate Student Debt

More and more students are going into debt pursuing their goal of higher education. For many students, grants and scholarships are not enough, and they must rely on student loans in order to pay for college. After graduation, you may receive a short grace period, or you may have to start repaying your student loans right away, depending on your lender. The most effective way to keep your student loan debt under control is through student loan consolidation.

Instructions

1

Gather all of your student loan paperwork from the last four years. Write out a list of the amounts you owe, the lenders and if your loan was a private or federal student loan.

2

Make sure your loans are eligible for consolidation. Loans must be in repayment, grace, deferment or default status to be eligible for consolidation. The Federal Student Aid website states that only loans eligible for consolidation are:

Subsidized Federal Stafford Loans
Subsidized Federal Consolidation Loans
Guaranteed Student Loans (GSL)
Unsubsidized and Nonsubsidized Federal Stafford Loans
Unsubsidized Federal Consolidation Loans
Direct PLUS Consolidation Loans
Federal Perkins Loans
Parent Loans for Undergraduate Students (PLUS)

Loans provided by a private lender are not eligible for consolidation.

3

Locate a lender that consolidates student loans. Follow the bank's application process. Most major banks will consolidate student loans; be sure to review the bank requirements for student loans.

4

Find out the weighted average of your new interest rate. After you consolidate your loan, you will have a new interest rate on your student loan. Make sure you are not charged any fees for consolidating your loans. This service should be free.