How Student Loan Repayment Programs Can Help You Pay Off Your Student Loans by Rob Hickey

During the college years students often struggle with tuition bills, laboratory materials and costs, and general college costs.  When parents need to help students meet their educational expenses, plus loans can provide the funds that they need. This is also a good time to consider combining the loans in order to reduce the student loan payment each month for the student or parent via Student Loan Repayment Programs.

Federal Stafford student loan consolidations are available as well as Perkins loans, health loans, the National Security Law, HPSL and even direct loans. You can only consolidate loans that are not in default, so you must first take care of outstanding balances on the loans in order to consolidate them with these loans.

There are no real disadvantages to the consolidation of student loans.  One of the few exceptions are Federal Perkins Loans.  Perkins loans are usually subsidized by the federal government, and are deferred while students are still in school. When you consolidate Perkins loans, will lose the subsidy.

The advantages of consolidation loans include only having one monthly payment, and getting a fixed interest rate.  Sometimes you can lower your interest rate and extend the length of the loan if your balance allows for it.  Some loans may be extended up to thirty years.   This can lead to lower monthly payments on the whole.  If you have Stafford loans, you should consider consolidating your loans as the grace period was 0.6 percent, and is lower than when it is repaid.

Stafford loans offer these outstanding options:

Offers standard repayment of principal and interest payments due each month throughout the repayment period.

Offers a graduated repayment that is smaller to start the process of repayment.

Stafford loans take your monthly income into consideration when you apply for a loan, and your payment is usually a fair percentage of your income.  StaffordLoan.com provides an income-sensitive repayment plan.

It provides an extension of the repayment terms of qualified federal Stafford, federal PLUS loans, and alternative / mergers of the federal loans borrowers have to pay.  Relief comes through the extension of the repayment period of up to 25 years.

It combines all of your monthly payments into one simple monthly payment.  You make a monthly payment, but get to retain the original terms and interest rates.

Students that are having trouble paying their student loans should consider the consolidation plan. Borrowers can get better terms for the period of the loan, and avoid the huge penalties and fees that are inherent to the original loans.

Merging your student loans can reduce the payments up to 60% if your loan is a federal loan, personal loan, parent plus loan, or Stafford loan.  It is important to make full use of federal financial aid before you turn to alternative financing options, such as personal loans. Refinancing your student loans will reduce your monthly payments and lock in a fixed interest rate. When you consolidate your student loans you are refinancing your existing student loans, and rolling them into a single manageable loan.