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Student Loans

Once you are sure you are taking a loan whether it is a federal loan or a private loan contrast the two. There are several different types of loans available to students. The simplest categorization is into federal student loans and private loans. Federally funded loans are administered inititially through the US Department of Education's Student Aid programs and are usually the easiest to get student loan consolidation for. Private student loans are administered by standard lending institutions. Generally charging higher interest rates than their federal counterparts. When looking for a loan you can also check for benefits. Is there a discount for paying by direct debit, does the interest rate fall if you make a certain number of payments on time.

When the time comes to consolidate student loans dont merge the two types together. First consolidate your federal loans then private loans:
  • Interest rates vary and remember they change on every July 1. It is possible to get locked in interest rates which stay the same for a period of time.


  • There are alternatives to loan consolidations. Students may want to look into loan-forgiveness programs. The programs normally pay or wipeout part of a students debt in exchange for particular types of work. Those who go into the teaching profession often have their loans cancelled.
    • The main advice is make inquiries with many companies and aim to get the lowest interest rate possible. It should be possible to get a rate as low as 4.5% if you search extensively. Also sometimes consolidation a loan may lower the overall interest rate but because your paying over a longer period of time in reality you may end up paying more, so do your homework first!