Direct loan consolidation is an excellent option that allows borrowers to consolidate their existing student loans. This is especially beneficial for those who are managing two or more loans. By consolidating the loans, it is possible to reduce the strain of monitoring repayments. Direct consolidation offers a variety of flexible repayment options and renewed deferments as compared to private loan consolidation.If you continue paying back student loans and are presently employed, you can opt for the IBR Plan or the Income-Based Repayment Plan. Under this plan, your yearly income is taken into account to determine your monthly repayment. In order to enroll for this program, you must have financial hardship, at least partial.As an alternate to the ICR or Income Contingent Repayment, this plan is designed in such a manner that it is easy for students to repay loans even if they land in a job that pays less such as public service careers. Monthly payments under this repayment plan are capped at fifteen percent of discretionary income. Discretionary income is the difference between 150% of poverty guideline for your state of residence and size of family and your AGI or Adjusted Gross Income.For those who file separate taxes and are married, direct loan consolidation income based repayment plan will consider only the income for calculating the amount for IBR payment. In order to be eligible for this plan of repayment, it is necessary to authorize the IRS or the US Internal Revenue Service who will then inform the Department of Education, US the exact amount of income you earn.You can obtain further information through the direct loan servicing center that will also help with the loan process and management. Check if you are eligible for income based repayment option as you reach out for direct loan consolidation.
