Consolidating loans while in school

The cost of a secondary education has increased substantially in recent years and it’s not showing any signs of slowing down any time soon.While the costs have gone up, the importance of getting a college degree is still there.Once scholarships and grants have been explored, many people turn to student loans.Student loans can help provide the funding that you need to get to college and obtain the education that you require.This is particularly true for grad school borrowers who use unsubsidized Direct loans and Graduate PLUS loans to finance their education.

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Because of this, many people who are interested in going to college have to explore different options for coming up with money to pay for school.For example, under the Public Service Loan Forgiveness Program (PSLFP), your Direct Loan balance may be eligible for forgiveness after 120 payments if you’ve worked in the public sector that entire time.Similarly, the Teacher Loan Forgiveness Program is available for teachers who work in schools that serve low-income families full-time for five consecutive years.Direct consolidation loans are now the only type of federal student consolidation loan.Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.As you weigh the pros and cons, keep in mind that timing is critical.With just a few exceptions, you get only one chance to consolidate with the government loan programs.Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at Loan gov, and they'll always get a fixed interest rate.This is often the reason that people cite when they say you shouldn’t combine federal and private loans.But before you dismiss the idea of refinancing, you should first take a look to see if any of these benefits apply to you.

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