I would like show you article about Student Loan Consolidation and Types of student loans. This is article from StudentDOC.com with links.
There are several types of loans available to students.
The simplest categorization is into federal student loans and private
loans. Federally funded loans are administered initially through the US
Department of Education's Federal Student Aid programs, and are usually
the easiest to get student loan consolidation services for. These
federal programs disburse about $60 billion a year in loans, work-study
support and grants. Stafford
loans are the most common form of federal loans for students, but there
are a variety of other federal payment plans - among them military /
ROTC plans to pay for college. Private
student loans are administered by standard lending institutions. Among
the most common are Citibank student loans and the Sallie Mae Signature
student loans. These lenders are basically providing unsecured (or in
some cases secured) loans to you as a student, and will most often
charge higher interest rates than their federal counterparts. Private
and federal loans, along with scholarships, can be combined to fund
your education. However, it's important that when it comes time to
consolidate student loans, you do not mix the two types together. You
should always consolidate your federal loans first, then separately
consolidate private student loan debt. The benefits of consolidating
your federal loans include: a lower interest rate (usually, but keep in
mind that interest rates change every July 1), increasing the time for
loan repayment to 30 years which reduces your monthly costs, and
reducing the number of lending institutions you send checks to every
month. For a more complete discussion of this topic and consolidation
eligibility criteria, visit our page on how to consolidate student
loans. Medical student loans fall into a special class, and are
discussed on our medical school loans page. Nearly
50% of recent college graduates took out student loans, with an average
borrowed around $10,000 (1). Until recently, student loan interest
rates ran between 6-8%. Recently, though, rates have fallen very low.
As of fall 2003, Stafford loan interest rates were in 3-4% range (2). Students
who currently have loans, either a single loan or multiple loans, have
a variety of options for reducing their payments and indebtedness.
Because interest rates have fallen, loans can be consolidated or in
some cases refinanced. When you're considering refinancing student
loans or student loan consolidation, you need to compare interest rates
before you consolidate federal student loans. Like
any debt, student loans can influence your credit and your future
decisions. Students who borrowed a substantial amount for college (more
than $5000) are less likely to pursue higher education (1). In
addition, student loan debt that exceed 8% of your income can be seen
negatively when your credit gets assessed for future loans (this is
especially true if you have one or more defaulted student 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. 2) Reduce your monthly payment. Since debt burden is
measured by comparing your loan payment to your income, reducing your
payment helps your credit evaluation.
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