Federal School Loan Consolidation - Cutting Through The Red Tape

If you’ve financed your education with a variety of student loans and are now facing a barrage of monthly payments, you may find that a student loan consolidation will work to your advantage. But if your loans are courtesy of the Federal government, you may not be surprised to learn that there is a plethora of regulations for you to follow in applying for student loan consolidation.

FFEL And Direct Consolidation Loans

The US Federal government offers two school loan consolidation options, the Federal Family Education Loan Program, or FFEL, and the Direct Consolidation Loan program. It’s up to you to understand how they differ.

If you have existing school loan consolidations which you wish to combine, the Direct Consolidation Loan Program must be willing to accept them. While some FFEL lenders may accept all eligible all for consolidation, others lenders may accept only FFEL loans. But if an FFEL lender refuses to include your non-FFEL loans in a school loan consolidation, it may offer you an alternative way to consolidate them.

Repayment Options

FFEL school loans consolidations are available with a variety of repayment options. They include the standard, graduated, extended, and income-sensitive repayment plans, and while every FFEL lender offers them, the details of each is different. The income-sensitive option, for example, factors the total student loan debt into the amount of the monthly repayments.
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Federal School Loan Consolidation