Student Loan Consolidation Programs: The Simple Way to Clearing Student Debt

Students and graduates have far more on their plates than many give them credit. Not only do they keep their grades up, they also face the unenviable task of clearing the college debt that is amassed while studying. But the task can be made much simpler through student loan consolidation programs, making the debt a lot more manageable.Typically, students have no great income to speak of so it is impossible for them to repay debts that may be as large as $50,000. This debt is usually spread between 4 or more individual loans, and with each individual loan is a different interest rate, thus pushing the overall cost of the debt upwards. Managing college debts involves consolidating these debts and replacing them with one affordable debt.There is no reason why student loans cannot be cleared swiftly through a consolidation program, the most effective way of lifting the financial pressure. With factors to consider and compromises to make, the route is clear.The Pros of ConsolidationLike all financial packages, it would be easy for a student loan consolidation program to turn out to be counter-productive. This is why taking care to select the right program is the only way to ensure the advantages are fully enjoyed, and a brighter financial future is formed for the student involved.Having several loans to repay at once creates some complexity, and it is this complexity that causes so much havoc. Different interest rates and different repayment schedules only succeeds in raising the overall debt. Replacing 4 or 5 loans with one single loan is the most constructive way of managing college debt.Of course, the combined debts of these loans can be quite high, ranging anything from $30,000 to $100,000, but clearing these student loans is made simple by buying them out with one consolidation loan. This way the monthly obligations can be slashed to half of the original sum.Managing Federal Student LoansSelecting the right student loan consolidation program depends on a number of factors, not least the type of the original loans. There are two basic types:  private and federal loans. But while private consolidation loans are pretty easy to secure, with lenders viewing them as another loan from which to profit, federal programs are a different matter.This is because federal loans are already low in interest, so the immediate benefits are not as great as with a private, more costly loan. And with regards federal loans, a choice between a Direct Loan or an FFEL Loan exists.  The US Department of Education provides a Direct Loan to applicants, while the FFEL Loans is only subsidized by the federal government.Managing college debts is easier with Direct Loans, but with FFEL Loans, the deal is struck with private lenders who cover the existing student loans. Interest rates are still low because of government involvement.Seeking a Consolidation ProgramGetting onto a student loan consolidation program is dependent on meeting set criteria, with these programs developed to benefit those students who are in genuine need. An applicant can only apply for an FFEL loan either immediately after graduation, when repayments have begun and once an emergency deferment has been granted to the borrower.The task of managing college debt is helped greatly when the lifetime of the consolidation loan is extended. This is because the size of the monthly repayments is lowered considerably. The programs have a maximum term of 30 years, so even the largest student loans can be repaid in time.