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Managing Your Money And Your Student Loans
By Rob Carlton
If you have a number of outstanding student loans, you may want to consider student loan debt consolidation. You will eliminate having many bills to pay on your student loans, and the total monthly payments can be significantly reduced as compared to the normal ten year payback option. A special program called FFEL (Federal Family Education Loan Program) allows commercial institutions, such as credit union, banks and other lenders to grant debt consolidation loans for the purpose of consolidating educational debt. In addition, the William D. Ford Federal Direct Loan Program allows for the federal government to grant student debt consolidation loans.
The majority of federal education loans can be included in these programs, whether or not they are loans that have been subsidized by the government. These include the FFEL Stafford loans, Health Education Assistance Loans, Federal Nursing Loans, Federal Perkins loans and SLS. Note that private education loans are not eligible for the debt consolidation programs.
If you need to find out whether your loan is eligible for a student loan debt consolidation, you should contact the appropriate Direct Loan Origination Center, Loan Consolidation Department. For instance, if you have a FFEL loan, contact a participating FFEL lender if you are interested in consolidating a FFEL loan.
You can apply for an educational debt consolidation loan even while you are still in school, as well as once you have graduated, left school without graduating, or reduced your student hours to half time enrollment or below. If you have all of your student loans with one FFEL
lender, you have to obtain your student consolidation loan from that same FFEL lender, except in the cases where the terms of an income sensitive loan are unacceptable. If you want to be considered for the William D. Ford "Direct Student Loan Debt Consolidation Loan", you have to already have a Stafford student loan (subsidized or unsubsidized) that will be included in the loan consolidation, or have at least one FFEL program Stafford loan to be included in it. Again, this can be subsidized or unsubsidized.
How do you go about choosing an unsecured debt consolidation program? The first step to take is to meet with a professional to advise you. He or she may be called a debt relief specialist, settlement specialist or client services representative. This person will answer your questions about the loan. The main thing about a debt consolidation loan is that it is intended to assist you, not make things better for your creditors. The company you are working with will handle the negotiations; they are all finance and debt professionals. This may not be the program for you, but it is worth looking at, and there are many unsecured debt consolidation programs that you can find out about, either by calling or by checking online.
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