Consolidate Federal Student Loans – How to Consolidate Student Loans in a Recession


If you are a recent college graduate or if you’re about to graduate, you probably began school when the economy seemed bright and rosy.  Like most students you probably took out quite a few loans anticipating that you would be able to easily pay them back once you graduated and got a job.  Now that the our economy is burning like a candle that was lit with a blow torch, what once seemed easy may, in reality, be quite a bit more challenging.The odds are that you are obligated to repay anywhere from $400 to $1,000 or more per month for your loans and since you only have a limited grace period it’s understandable if you are beginning to freak out.  If that sounds like you, then stop it!Even though things don’t look that great on the surface, you can get help.  You are still able to lower your monthly payments with a federal government student loan consolidation.Federal student loan consolidation was set up by the US government to help students who have more than one loan they are trying to repay. For example, if you have both a Perkins Loan and a Stafford Loan and you can’t make your combined monthly payments this plan could be what you’re looking for.Essentially, one of the student loan consolidation companies will help you to consolidate your student loans into one loan with one payment rather than having multiple loans with many payments due throughout the month.When you consolidate federal student loans, this single payment will be less than the total of your other payments combined.The interest rate may be approximately the same or it could be lower, depending upon which of the four payment plans you choose.However, the term of this loan will probably be longer than the terms of the loans you are now carrying.  This is one of the primary reasons that your payments can be reduced by hundreds of dollars per month.  You may end up paying more for your loans in the long term, but the bottom line is that(1) it will be easier for you to repay them, and(2) your credit rating will not be impaired for non-payment of these loans.Loan consolidation companies help over 100,000 students a year to consolidate student loans.  At the time this article is written, even though Sallie Mae has suspended participation in the federal consolidation loan program because of severe legislative cuts made by Congress, entities such as the Federal Student Loan Program, Citibank, and Nelnet are still offering help with student loan consolidations.