Student Debt Consolidation Loans: Government Programs to Alleviate Crippling Debt

For many students the reward that greets them after they graduate from college is a huge debt that sets them back financially even before they get their first job. Finding a way to alleviate this financial pressure is essential, and student debt consolidation loans are the most practical solution.The good news is that there are government consolidation programs available that can play a major role in easing the pressures by combining the debts from several student loans and clearing them in one go. And because they are government backed, the interest rates charged are lower than usual, and repayment terms are more flexible.There is a selection of consolidation loan programs available, and it is important to find the right one to ensure the maximum benefits are enjoyed.How Debt Consolidation WorksThe basic idea behind consolidation is that a number of elements come together to make a situation stronger.  When it comes to student debt consolidation loans, the idea is that all of the existing individual debts are combined and bought out, but with loan terms that are more manageable that those of the original loans.For example, if there are 5 individual debts (credit card, personal loan, fees etc) they each have their own interest rate. The average of these interest rates can be quite high, making the overall cost of debt quite high too. However, government consolidation programs can make the task easier.There is a small range of consolidation loans available to students seeking to ease the weight of debt on their shoulders, but they are highly effective in making a difference. The government buys out the loan balances and replaces them with a more manageable repayment term.Government Consolidation Plans On OfferThrough federal funding, the government is well known for providing funding options to students. These are provided through the Family Education Loan (FFEL) Program and Direct Loan Program. But few realize that with student debt consolidation loans are also provided by the government.  There are 4 of them in total, with the best one depending on the specific needs of the applicant, and terms of their respective student loans. This range includes a standard plan, an extended standard plan, a graduated plan and an income contingent repayment plan.By offering a range of government consolidation programs, students are given flexibility in their options. And unlike many other consolidation loans, these can be used to buy out student loans from public and private (commercial) loan sources.The Consolidation OptionsThe range of student debt consolidation loan programs is designed to suit a selection of student and graduate conditions. Principally, the difference between the 4 types is their repayment schedules. For example, the standard plan charges a low fixed rate of interest, with repayments made monthly over a period of up to 10 years.Alternatively, the extended standard plan is the same but with a longer term – of up to 30 years, making it ideal for graduates with very high student debts. The gradated plan is a government consolidation program that begins with very low payments, and rises every 2 years as the student increases their income.Finally, the income contingent repayment plan sees the loan repaid each monthly, in accordance with the income they are earning at the time. Consolidation loans secured through these programs can be the solution to financial woes.