Consolidating College Loans: The 4 Main Plans Available

In many cases, the principal concern for students is not their studies, but the debts incurred by at college. Between college fees and living expenses, the loans required to simply survive can be huge. But by consolidating college loans picked up over the course of a college career, the weight of debt lessens considerably.While there are many private lenders advertising this option to students and graduates, these generally only relate to any private loans taken out, and not the federal financial aid packages that can also be taken on. But the good news is that there is also a range of consolidation plans for those with federal loans.In all, there are four consolidation plans available. All of these options are designed to lower the overall cost of college loans, and make repayment of the debt easier, especially for those who are still without a reliable income. But it also includes those who are mid-career with a significant part of their debt still to clear.Standard Consolidation PlanThis plan is perfect for consolidating college loans for recent graduates who already have a regular source of income, whether because they have already started a career or have found casual work in bars, restaurants or the retail injury.The term of the loan plan has a limit of 10 years, making the regular monthly payments much more affordable than the original federal financial aid loans. The interest rate is fixed at a low rate for the duration, so the loan plan is easy to budget for, with the payments never changing.Extended Payment PlanThis is ideal for those who have a lower monthly income, and face college loans with terms that have made their debt too difficult to manage. The terms of this consolidation plan are very similar to those of the standard plan, but the lifetime of the loan is much longer.At between 15 and 30 years, this plan is recommended to those graduates facing the higher level of debt. The long term means monthly repayments can be kept to a minimum, thereby increasing affordability even to those on small salaries. And because the low interest rate is fixed for the full term of the loan, budgeting is easy, making consolidating college loans almost ideal.Graduated Payment PlanDesigned for students who are trying to balance the pressures of study and repaying federal financial aid, the graduated plan features a steadily increasing repayment structure. The first repayment amount is quite low, making it very affordable while in college. But, every two years the sum increases to reduce the debt that bit more.The lifetime of this option is also 15 to 30 years, so fully repaying college loans can still take some time. The chief advantage, however, is that the initial cost is extremely low.Income Contingent Payment PlanFinally, the fourth option in consolidating college loans is the income contingent plan, which is far more complicated that any of the other three. The monthly repayment is carefully calculated, with the income level of the student in question only part of the equation. Also taken into account is the income of the family of the student, and the degree of debt they already face.Of course, federal financial aid is only available to students who are in need of help to pay college fees. But when the family is also in a tight financial situation, the chances of financial relief from them is lessened. With the fourth plan, college loans can be repaid according to what is affordable to the individual applicant.