financial independence

Now that the new student loan regulations are in place, many borrowers are questioning whether or not student loan consolidation is still worth pursuing. The answer, YES! If for no other reason than to eliminate excessive management demands for borrowers who likely have multiple college loans due at different times of the month, recent graduates should definitely consider a student loan consolidation on their outstanding student loan debt.

Consolidating eligible student loans will still offer some great benefits for recent graduates. Borrowers will benefit from having a single lender on their student loans as well as one student loan payment each month. Students may also have variable student loan rates that can be consolidated into a single fixed-rate student loan. By consolidating, this will prevent any future increases to the borrowers student loans.

Student loan consolidation also offers the option of extending the repayment term on their student loans, meaning that it can offer a borrower better control over monthly expenses, and make sure that their student loan payments are within reach of a new graduate's budget.

Borrowers whose federal college loans are in a grace period, repayment, deferment or forbearance and who are not enrolled in school more than half-time, are eligible to consolidate their college loans. Parents who have borrowed money to finance a child's education can also consolidate their parent loans. However, it is not possible for a parent to consolidate their parent loans with their children’s student loans, even if the loans benefited only one borrower.

Additionally, borrowers who consolidate their federal student loans will have the ability to reset all of their deferment and forbearance benefits. Federal student loan borrowers currently have three years of both deferment and forbearance on their student loans. Though, once borrowers have used that time up, they can no longer get it back. So, if borrowers have used up all of their deferment and forbearance benefits, they can now consolidate their student loans in a federal student loan consolidation and receive all that time back. Once borrowers student loans are consolidated, they will have a full three years of deferment and another full three years of forbearance back on their student loans, even if they used up all their time before consolidating.

Some private lenders also offer student loan consolidation. If you have private student loans and are interested in consolidating those loans, talk to your lender about what options are available for a private loan consolidation. Although the benefits are usually not as good as with a federal student loan consolidation, you may still benefit from consolidating those private student loans and simplify those payments.