Think Twice Before You Consolidate – See Why

Federal loan consolidation is an option that may help you manage repayment of your federal student loans, particularly if you still have Federal Stafford/Direct Loans with variable interest rates. But, consolidation may not be right for you, particularly if you only have federal student loans with fixed interest rates. You may be able to save money both in terms of your monthly loan payment and in the total amount paid if you do not consolidate your fixed rate federal student loans.

There are three primary reasons why you should weigh the benefits and costs before rushing into consolidation.

* First, Federal Stafford/Direct Loans first disbursed on or after July 1, 2006, have fixed interest rates. Thus, the fixed interest rate structure of the Federal Consolidation Loan provides no advantage if you have these new fixed rate loans.
* Second, many graduate/professional student borrowers likely now qualify for the Extended Repayment option on their Federal Stafford/Direct and Federal PLUS loans. That option provides a 25-year repayment period if you have more than $30,000 in eligible federal student loan debt and first borrowed an eligible loan on or after October 7, 1998. It allows you to reduce your monthly loan payment without having to consolidate.
* Most importantly, Access Group offers on-time payment incentives on Federal Stafford and Federal PLUS Loans that are more beneficial financially than those offered on consolidation loans.