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.