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Eligibility for federal student loan consolidation

You are eligible to consolidate federal student loans when:

  • You are in the “grace period” of the loan or actively repaying your loan
  • You are carrying a minimum loan amount, $10,000 is typical

Get a free assessment of your student loan debt.

The difference between federal and private student loans


Private loans don’t have these advantages – they are really just loans either secured or unsecured, and you have to pay them back just like any other loan.


Student loan debt

About two-thirds of recent college graduates took out student loans, with an average borrowed around $26,600 (1). As of fall 2003, subsidized Stafford loan interest rates were in the 3-4 percent range (2). Consolidation interest rates can be much lower (under 2 percent), but this comes with very specific requirements, like good repayment history.

Like any debt, student loans can influence your credit and your future decisions. Students who borrowed a substantial amount for college (more than $5,000) are less likely to pursue higher education. In addition, student loan debt that exceeds 8 percent of your income can be seen negatively when your credit gets assessed for future loans.

Two ways to reduce the debt burden are:

    1) Reduce or eliminate the principal balance. Specific types of loans can sometimes be forgiven by service or other higher education – look into the specific student loan program you have.

References and Links

(1) State by State Data. Institute for College Access and Success, 2012.
(2) Stafford Loan Interest Rates. Stafford Loan, 2013.

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