Consolidating Perkins Loans

Consolidating Perkins Loans

You can consolidate PerkinsLoans into a Direct Consolidation Loan if you include at least one Direct Loan or Federal Family Education Loan (FFEL) in their request. Perkins Loans cannot be included in a Direct Consolidation Loan by themselves. In addition, all Perkins Loans consolidated into the Direct Loan Program will be included in the unsubsidized portion of the Direct Consolidation Loan.
However, you should bear in mind that while gaining the benefits of the Direct Consolidation Loan Program, you also lose the benefits associated with the Perkins Loan Program. Before making a decision on consolidating Perkins Loans, there are some aspects you need to think about.
Thus, when you include a Perkins Loan in a Direct Consolidation Loan, you lose cancellation benefits, such as performing certain kinds of public service (like being a nurse, a law enforcement officer).  In other words, you’ll pay full price for your Perkins student loan.
Moreover, you lose the six-nine month grace period you have for the Perkins Loan if you consolidate. Moreover, as a Perkins Loan is included in the unsubsidized portion of a Direct Consolidation Loan, you as a borrower are responsible for the interest that accrues throughout the deferment period.
However, Perkins Loans do have a fixed repayment period of ten years, while the repayment period is more flexible for direct consolidation student loans. Thus, the latter can have standard, extended, graduates and income contingent repayment plans, which can lead to a lower monthly payment.
Overall, Perkins student loans are not as well suited for consolidation as Stafford and PLUS federal loans. It is best to speak to your lender, which is your college or university in most cases. They usually know best what your options are and have access to all your payment and account information.

Student loan consolidation

Student loan consolidation

Student loan consolidation allows you to better manage your debt, because you’ll only have one lender and one monthly bill to deal with. Borrowers will have only U.S. Department of Education as lender for all loans included in a Direct Consolidation Loan.

Another advantage of debt consolidation is that you’ll benefit from flexible repayment options. Students or their parents can choose from multiple flexible plans, designed to meet the different needs of the borrowers. Moreover, you can even switch repayment plans anytime if you like.

Also, student loan consolidation allows for varied deferment options. A deferment is a temporary suspension of your loan payment. If you have exhausted all your deferment options of your current federal education loans, you can renew some of them under a Direct Consolidation Loan.

Moreover, student loans consolidation could lead to reduced monthly payments, easing the strain on your budget. It also makes possible the retention of subsidy benefits. There are two possible portions to a Direct Consolidation Loan, subsidized and unsubsidized. Borrowers retain their subsidy benefits on loans that are consolidated into the subsidized portion of a Direct Consolidation Loan.

During a one-year period, students who meet certain requirements may consolidate loans that are in an in-school status into a Direct Consolidation Loan. Direct Consolidation Loans may be made under this temporary provision to borrowers whose consolidation applications were received on or after July 1, 2010 and before July 1, 2011. However, you will lose the grace period on a FFEL Subsidized/Unsubsidized Stafford Loan or Direct Subsidized/Unsubsidized Loan by consolidating the loan while it is in an in-school status.

Federal Pell Grant does not have to be repaid

Federal Pell Grant

A Federal Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are awarded usually only to undergraduate students who have not earned a bachelor's or a professional degree. (In some cases, however, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.) Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.

How much can I get?

The maximum Pell Grant award for the 2011-12 award year (July 1, 2011 to June 30, 2012) is $5,550. The amount you get, though, will depend not only on your financial need, but also on your costs to attend school, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.

The maximum award amount is given for any Pell Grant eligible student whose parent or guardian died as a result of military service in Iraq or Afghanistan after Sept.11, 2001. You must be under 24 years old or enrolled at least part-time in college at the time of your parent's or guardian's death.

Note: Fiscal Year 2011 appropriations eliminated the allowance of receiving up to two consecutive Pell Grant awards during a single award year. Beginning with the 2011-12 award year, you may receive only one Pell Grant award during a single award year.

If you received a Pell Grant for the first time on or after July 1, 2008, you can only receive the Pell Grant for up to 18 semesters or the equivalent.

If I am eligible, how will I get the Pell Grant money?

Your school can apply Pell Grant funds to your school costs, pay you directly (usually by check), or combine these methods. The school must tell you in writing how much your award will be and how and when you'll be paid. Schools must disburse funds at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.

Pell grants

Quick information on Pell grants:
  • A Federal Pell Grant, unlike a loan, does not have to be repaid.
  • The maximum Pell grant for the 2011-12 award year (July 1, 2011, to June 30, 2012) is $5,550.
  • The amount depends on your financial need, costs to attend school, status as a full-time or part-time student, and plans to attend school for a full academic year or less.
  • Learn more about Pell grants.
  • To apply, complete the FAFSA.

Consolidating Private Student Loans Advantages & Disadvantages

Consolidating Private Student Loans

Are you looking for inforamtion on consolidating private student loans, well you are in the right places as we will show you both the advantages and disadvantages of this process. Lets face it, pretty much everyone that goes to college has to take out more than just one loan to have enough to pay their tuition, some three or four or more. Consolidating private student loans can be an excellent way to save you both time and money, among many other things, but is it for you? The next section will provide and overview of the process as well as go into detail about both sides to consolidating private student loans, so you can decide for yourself.

Overview Of Consolidating Private Student Loans

If you aren’t familiar with the process of consolidating private student loans, it is essentially where all of your loans are combined into one lump sum where you just pay one loan payment per month. You can do this through many consolidation companies out there who will take care of all the major details, like paying off your loan lenders so that they can now be your sole loan lender, so where all you have to worry about is getting your payment in on time.

Pros & Cons of Consolidating Private Student Loans

First we will start with the benefits that are provided to one who is thinking about consolidating private student loans:


  • Consolidation companies reset all of the financial payment information once they obtain your loans, like monthly payment as well as interest rate. By searching for a consolidation company that does private student loans, you can get one who requires both lower monthly payments as well as lower interest rates compared to what you were paying to your previous lenders. A lower credit score can be attained if your credit has improved from when you first took out your loans, as a credit check will be run, and is one of the main factors in your eligibility.
  • Another great benefit to consolidating private student loans as that most all consolidation companies have very flexible repayment options, meaning that you can pay your student loan off a lot faster by upping the monthly payment, as well as save in the interest you would have paid if you just paid the minimum.
  • You only have to focus on making one payment instead of multiple as well as only have to call one resource for any questions related to your repayment programs.


Here are some of the drawbacks of consolidating private student loans:

  • The first disadvantage to consolidating private student loans is the oriantation fee, also known as the activation fee, which is what you pay when you first establish an account with a consolidation company, can be very high in many cases. For example, say that you will have a 50,000 dollar sum in which you consolidate, and the activation fee is 4 percent, that equates to an extra 2000 dollars you have to pay.
  • Second, if by chance your credit schore is down in the dumps, consolidating your private student loans can result in you paying a lot more when it comes to interest. Like is was said above, the interest rate that you will pay is heavily based on your credit score, and it will be much higher if you have a negative credit history.
  • Consolidating private student loans can also result in you not being able to qualify for certain forgiveness programs, which are programs in which a big part of your debt can be wiped away.
  • Like it was said above, the repayment methods are flexible which lead many to choosing a longer period in which they want to pay off their debt. This will result in you paying a lot more on your loan and interest.

Consolidating Private Student Loans – Conclusion

Now that you know what the benefits and disadvantages are of consolidating private student loans, it should be easier to make your descision whether you want to go for it or not. It can be a great benefit to some, but can really be an even bigger burden to others. The best thing to do now if you are still contemplating whether or not to consolidate your private student loans is to do your homework by taking the pros if they are relevant to your situation, as well as weighing the cons to see if benefits outweigh them. The other thing you can do when thinking about consolidating private student loans is to shop around with different companies, and view what their guidelines are.

Private Student Loans Companies and Overview

Alternative Student Loans

Alternative student loans, also referred to as private student loans, are there to cover the cost of college minus federal loans and/or any other financial aid they are receiving. They are can be used for all different types of students like undergraduates and graduates along with residency students and those studying for the bar and many more, and can be used for schooling and other school related tuitions like transportation, a computer, supplies, cost of living, To get you familiar with alternative student loans, here is a bullet point overview and following the overview is a list private student loan providers.

Alternative Student Loans Overview

  • Loans are generally based of your credit score or the score of your cosigner.
  • You must be enrolled in a half time class schedule as well as provide proof that you are either a resident of the US or qualifying non resident.
  • They have what is called “cosigner release” which is where you provide a cosigner with a worth credit score, and later on into your contract the loan is tranferred under the students name enabling them to build their own credit score.
  • Interest rates are generally higher than that of a federal student loan, so it is suggested that students apply for all the federal aid that they can before considering an alternative student loan.
  • Alternative student loans consolidation must be done seperately from federal student loans.
  • There are three major repayment options; full deferral, which is no payments on the loan or interest payments, immediate repayment, which is where you begin paying 30 to 60 days after you receive your loan, interest only, where you either pay our interest while you are in school or let it build up and pay it when you are finished with your education.
  • Unlike federal student loans, alternative student loans are not eligible for student loan foriveness (currently).
  • Private student loans tend to demand stricter repayment terms compared to federal loans.
  • Interest rates on alternative student loans are offered in LIBOR rates(London Inter-Bank Offered Rate).

Alternative Student Loans Providers

  • Salie Mae Education Trust – Available for undergraduate, graduate and professional students, offering a fairly flexible repayment term of 15 to 30 years, LIBOR interest rates of 2.5 – 10.05 percent, 6 month grace period until you have to start paying your monthly dues and rewards for on time payments. Salie Mae alternative student loans also come with the benefit of up to 5,000 dollars coverage due to the the potential lost to medical payments.
  • Wachovia Alternative Student Loans – Now part of West Fargo and offer interest rates that are variable and start as low as 3.40, rate discounts that go as high as 1 percent, you can borrow up to 25,000 per year and you do not have to pay while your are in school.

Getting The Best Alternative Student Loans

It is a good idea to shop around for alternative student loan providers and not jump on the first ad you see. To get the best provider, remeber to ask some of the following questions:

  • Are there any fees, like for forbearance, and what are they?
  • Is the interest rate fixed or variable? (Try for fixed at all costs)
  • Is the margin subject to change, and if so what is the determinating factor of the margin number.
  • Are there penalties for paying a loan off earlier than scheduled?
  • What is the interest rate cap if there is one?
  • Is there a rate offered that you can get a fixed interest rate?
  • Are the discounts offered permanent or do they change after a limited time?
  • If by chance it is variable, what index amount is it tied to, or what is the highest amount they can go up to.

Like it was said earlier, it is best to apply for federal student loans and grants before you entertain the option of alternative student loans. If you haven’t done so alread, you should fill out a FAFSA ,which stands for Free Application of Federal Student Aid, which will determine all the grants and student loans that you are eligible for, based on their EFC or Expect Family Contribute sheet that is given to you after you fill out the FAFSA.

Major Overview of Direct Student Loans

Direct Loans Student Loans

Direct loans student loans are offered through the William D. Ford Direct Student Loan Program with the lender of these loans being the Department of Education. Direct loans student loans are 100 percent federal loans and are offere to students as well as parents of dependable students, in the form or low interest loans as well as many other benefits that can make your college education a lot more affordable. There are different options that one can choose from that can help you attain your degree all of them are discussed in full detail below as well as the repayment options that are available to you when you start paying off your loan.

Direct Loans Student Loans Offered

There are two different types of direct loans student loans offered through the Ferderal Direct Student Loan Program (FDSLP), those are subsidized and unsubsidized Stafford student loans. Each type is discussed below:


Stafford direct loans student loans that are subsidized are given based totally off the financial need of the student, meaning those who need them most tend to get them most. These loans provide benefits to the student like:

  • You do not have to pay any interest payments while in school as the government pays them for you, and you don’t have to pay them back if you are in full time enrollment.
  • 6 month grace periods where you do not have to pay your student loans for 6 months prior to your graduation.
  • You can defer these direct loans student loans as well which means that, which is an agreed postponement of your monthly loan payments.
  • These loans are offered at sums start at 2,625 for your first year, 3,500 for your second year, 5,000 dollars per year after you the completion of your first two years, and lastly 8,500 dollars a year for graduate students.


The ubsubsidized direct loans student loans option is not needs based meaning that it is much easier to qualify for, but it charges you with interest payments from day one, which can either be taken care of while in school, or paying them offer later when school is over. Here is the major information on unsubsidized direct loans student loans:

  • Interest rates start as low as 3.10 percent.
  • 6 month grace period is offered where you will not be charged interest as well.
  • There activation fee for the loan is 4 percent.
  • Borrowing sum totals are up to 4000 dollars for both first and second years of schooling, 5000 dollars per year after you complete your second year of enrollment which can be attained all the way up to graduate school, for graduate and professional students you can borrow up to 10,000 dollars per school year.

Direct Loans Student Loans Repayment Options

Direct loans student loans have 4 different repayment options which you can choose from, whichever one best suits what you can afford as well as how fast you want to pay it back. Here are the direct loans student loans repayment options:

  1. Standard Repayment – This option provides you with up to a 10 year repayment term.
  2. Extended Repayemnt – This direct loans student loans repayment method allows anywhere from 12 to 30 years of time for you to repay you student loans.
  3. Graduated Repayment – This option also provides a 12 to 30 year repayment plan and with this method your monthly payments increase every two years.
  4. Income Contigent Repayment – This last direct loans student loans repayment method is based on a percentage of your monthly income, usually having your monthly payments being set at 15 percent of you montly income.

Direct Loans Student Loans Deferment Options

If you want to defer your direct loans student loans, you need to prove one of the following categories:

  1. Economic Hardship
  2. Forbearance
  3. Default
  4. Disablility
  5. Unemployed

This is a main over view about direct loans student loans which can assist you in making your education more affordable and have provided millions of individuals with money to go back to school and further their education.

Apply For Student Loans

If you going to apply for student loans anytime soon, you may be wondering where to start as well as the best way to go about this search, as this funding will be vital for obtaining a college degree. Considering this, we have some great tips for you to follow that will allow you get on the right track when it comes to applying for student loans.

Apply For Student Loans That Are Federal

There are two types of loans, federal and private, both of which serve their place on the quest for college money. Federal loans, those lended either directly or indirectly from the governement should always be applied for first as:

  • Interest percentages are much lower.
  • They have more flexible repayment plans, like the Income Based Repayment (IBR), which allows the borrower to have a monthly payment which equates to around 10 to 15 percent of their monthly income.

These federal student loans come in the form of three different types which are; Stafford Loans, Perkins Loans and PLUS loans, which some of them have the subsidized option, which is where your eligibility is based soley off financial need, as well as unsubsidized, which eligiblity is not based of financial need.

In order to apply for student loans that are federal, all applicants must fill out a Free Application for Federal Student Aid also known as a FAFSA, which will determine, through the Ecpected Family Contribution (EFC) section, how much money the student will be eligible for in the form of federal loans. Besides being able to find out how much money is going to be made available in the form of federal student loans through FAFSA, the applicant will also be able to find out information on other forms of financial aid like;

  • Federal grants, like the Pell Grant which offers students up to 5,550 dollars per year, which doesnt have to be paid back, among others.
  • Work study programs

Apply For Student Loans That Are Private

Private student loans should be your last resort when you set out to apply for student loans. These loans are made availabe through private lenders like banks and institutions among others, which are there to provide you with the ammount of money that federal loans as well as any other financial aid you are receiving, didn’t cover. In order to get the best private student loans, a couple tips that are good to follow are;

  • Either have good credit, or find a co-signer who does, which a co-signer can be anyone from a parent to a friend. To make your chances of eligiblity the best for private student loans, do your best to get a credit score that is higher than 700. This will avoid rejection of your application as well as come with lower interest rates and other fees.
  • Applying for student loans that are private come with two different types of interest, both LIBOR and PRIME. The best private student loans come with rates that are; LIBOR 2.0% and PRIME .50%.
  • Find loans that come with no “activation” or “origination” fees, both meaning the same, which is the fee for taking out a loan.

Student Loan Default

Student Loan Default

Student Loan Default is basically when one doesn’t pay their payments one a student loan or loans during the time period of 270 – 360 days after they leave school. This can be due to the lack of resources, or any other reason, but once you fail to make payments, you enter into student loan default, or in other words your loan is declared defaulted. The bad thing about student loan default is that once it is defaulted deferment, which is an agreement between you and your loan lender of a postponement of payments, is no longer an option.

This is when your debt on the loan will be turned over to a collection agency after your delinquency period is over, which is the weeks or months of non payment time before it goest to a collection agecny. The student loan default not only still requires that you pay the loan amount, but you will also be charged with a fee for the transfer of the debt from your loan lender to the collection agency, and any other fee like court fees or paying for an attorney in the event you are sued for the loan. There are other details as well where if you have a student loan default it can keep you from receiving other financial aid, and some social security benefits being taken away, a percentage of your earnings can be taken from you and any tax refunds can be taken from you as a way to pay off your debt.

Student Loan Default – How To Avoid It

It is just a fact that often times when fresh out of college, job don’t exactly fall into your lap, and can take a while securing a job. Due to this fact, it may seem like an option to put off payments, but your shouldn’t at all costs. Below are 3 ways on how to avoid student loan default, so you don’t have to deal with any of the above afflictions.

  1. Student loan default can be avoided often times by choosing to consolidate your student loans. Consolidatin can help you group all your loan payments into one payment as well as extend the time in which you have to pay it back, meaning that your monthly payment will be lower. Although this option means that because of the extnesion in repayment time, you will end up paying more in the long run, you can always pay more when you get your job and make up for lost time. So consoldiation can be a great way to help you avoid student loan default.
  2. Student loan default can also be avoided by deferrment as said above. If you haven’t defaulted on your student loan yet, then this is a viable option to consider. Basically what happens in student loan deferrment is that you get to postpone your payments for a certain amount of time by providing proof that you are going through financial hardship. The only drawback about this plan is that once you start up with payments again, you will have to pay a larger sum each month than the original monthly payment. But all in all, this is another great way to avoid student loan default.
  3. The last way to avoid student loan default is to know precisely how long your grace period is. By knowing this you will know how long you have before you have to start paying off you student loans, which during that time you can get a part time job, if you haven’t found a full time job yet, and save up for a few months worth of loans, so then you will have more time to do a more extensive search for a full time job.

Student Loan Default – Conclusion

If you are on the verge of student loan default, you should go to a site called where you can receive help in resolving student loan problems that you have.

The main thing to remember is to communicate with your loan lenders when trying to avoid student default. Their are more likely to help you out if you are letting them know what your situation is instead of not calling at all. Often times this method of avoiding student loan default can result in them lowering your repayment fee for monthly bills enabling you to be able to afford payments.

Student Loan Limits

Student Loan Limits
When it coems time to pay tuition, it can be tough gathering all the money you need together, so you may be concerned with what student loan limits are at, and how they can assist you in providing enough funding to be able to pay for your tuition. Being that there are both private and federal student loan limits, we will discect the limits for each, showing you the range of what you can qualify for when going to apply for loans.

Federal Student Loan Limts

Stafford Loans
Stafford Loans come in the form of both subsidized or needs based loans, as well as unsubidized, or not based off of financial needs. The student loan limts for Stafford Loans differ for both subsidized and usubsidized, and are currently set at:
  • Subsidized – Student loan limits are set for each year of schooling for subsidized Staffords Loans, and range from; 1st years up to $3,500, 2nd years up to $4,500 and 3rd years and above who have a limit of $5,500. Graduate loan limits are set at up to $6,500 per year. Lifetime loan limits are set at up to $23,000
  • Unsubsidized – For unsubsidized Stafford Loans, they have categories of both dependent and independent students, with loan limits for students that are independent being much hire. Loan limits for dependent students are up to $2,000 per year no matter what year you are in, and up to $8,000 throughout the lifetime of ones schooling. The independent student loan limits are; up to $6,000 for both the 2st and 2nd years, from the 3rd year on loan limits are up to $7,000 and for graduates their borrowing limits are up to $12,000 each year. The lifetime borrowing limits are set at #34,500 for the Stafford Loan Program.
Perkins Loans
  • Student loan limits for Federal Perkins Loans are set at up to $5,500 per year for undergraduates, and up to $8,500 per year for graduates. Their lifetime loan limits are set at $27,500 for undergraduates and at $60,000 for the cumulative studies of both undergraduates and graduates.
PLUS Loans
  • PLUS Loan differ from that of the loans programs mentioned above as they are for parents who apply for loans that are designated for their dependant children. The loans limits students can enjoy with PLUS Loans are the “Cost of Attendence” minus whatever other student aid they are receiving.

Private Student Loan Limits

When it comes to the private student loan limits, one gets more free reign on things, as you can borrow how ever much you need to compensate for what your federal student aid didn’t cover. So say, for example, your costs of attendance is $20,000 for the year, and you received $2000 from the Pell Grant Program, $4000 from the Stafford Loan Program and $1000 from any other source of federal student aid, totaling your feder student aid to $7000, your student loan limits for borrowing from a private lender would be set at $13,000. Now private student loans can be great and can help you cover the rest of your tuition costs, but they tend to come with higher interest rates as well as less flexible repayment terms, compared to federal loans, so the best method to use when going and applying for private student loans is to take somebody who has an awesome credit score, like 750 or higher, which will both drop the interest rates lower than what you would have paid with bad credit, as well as set your up for other discounts.
(The student loan limits used above are for examples purposes, and by no means represent what you may or may not recieved in federal loan money.)