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School Loan Consolidation

Victoria Said:

Is there a single lender rule in federal school loan consolidation?

We Answered:

No, the single holder rule was lifted in June. As a result, lots of shady companies have been aggressively trying to to lure college students to consolidate with them.

Don't be fooled by promises of lower interest rates. Rates are set by the government and are the same no matter whom you consolidate with. The only difference is what they call "borrower benefits" - such as a reduction of interest rate after you pay on time for a certain number of months.

Sallie Mae is the biggest and most experienced consolidator of student loans. You can take advantage of their calculators, concierge service (where they fill out the paperwork for you) and other information and tools at

Ivan Said:

Where do I find a school loan consolidation place?

We Answered:

There are lots of places to consolidate your student loans. The general guidelines are:

No longer enrolled more than half time in school.
In repayment or in a loan grace period. (normally 6 months after leaving school)
Have not previously consolidated your loans.

There are differences in the program benefits so be sure to ask about any special offers that may be available.
For example:
Is there a discount for auto-debit of your payment?
Are there any on-time payment discounts?

The two I general recommend both have online applications and can get you approved pretty quickly. Student Loan Advisors can be found at

By law there are no application fees, so you can try as many as you'd like and determine who has the best offer for you.

Alma Said:

I keep getting phone calls about federal school loan consolidation, who can I trust?

We Answered:

Now is the time when you will get a lot of calls, mail, and emails about this. There are dozens of loan companies out there that ALL want your business... Generally, the companies that call you out of the blue are the ones that you shouldn't trust -- they're engaging in a practice called Direct Marketing, which is usually a sign that their company isn't strong enough to get its business in a more "low-pressure" way. Most good companies won't call you unless it is (a) on your school's behalf or (b) you are already their customer.

You can listen to what they have to say, but don't apply for anything or give out your personal information unless YOU called THEM. (Even if you do trust them, it's often easier to consolidate online or on paper -- that way you can cross your "t"s and dot your "i"s and keep a record of the transaction).

Consolidating soon isn't a bad idea -- rates will be increasing beginning July 1st -- but if you decide to do it, weigh your options. You might first try contacting the company with whom you borrowed your existing loans. Alternatively, you could ask your school's Financial Aid office for names of companies that they trust or with whom they have existing relationships.

See the link below (towards the bottom) for a list of the largest student loan consolidators -- it's a good place to start looking for an established education lender.

Paula Said:

School Loan consolidation?

We Answered:

Student consolidation loan involves converting the loans taken by the students or parents into a single big loan from one lender. They are available as FFELP, FISL, Perkins, HEAL, Health Professional Student Loans, NSL, Guaranteed Student Loans and Direct loans. Few of the lenders let you consolidate these loans as private loans.

You pay lower monthly installments since the duration of these loans is more than 10 years. Usually, these loans last for 12-30 years according to the amount borrowed. This is an easier way for you to repay the loan without having to face financial crunch. However, you pay more interest as the loan period is more.

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