Pros cons consolidating federal loans

Select, economically disadvantaged students are eligible for additional loans through the Perkins program.The aid is designed to increase college access for the neediest groups of students.When you consolidate your private and federal loans through a credit union or bank, you could be offered a rate that is lower than what you’re paying right now.But, consolidating student loans is not right for everyone.Students with multiple federal loans are increasingly concerned about how they will meet repayment obligations after graduation.

And you can often get a lower monthly payment because you will have a longer repayment period – so there are some trade-offs to keep in mind.If you’re struggling under the pressure of your student debt, you’re not alone.According to the Institute for College Access & Success, 69 percent of seniors who graduated from public and nonprofit colleges in 2014 had student loan debt — to the tune of an average of ,950.Over 10 years, you’ll pay about ,000 in interest on your original principal of ,000. Under your new loan terms, your loans will be consolidated into one ,000 loan—and you’ll have one new fixed interest rate, which is determined by taking the weighted average of the interest rates on your previous loans, and rounding up to the nearest one-eighth of one percent. Now, entering your loan information into a loan consolidation calculator, you’ll find that consolidating your loans gives you a new repayment period, which is figured based on the amount you owe – the more you owe, the longer this repayment period will be.It can vary from 10 to 30 years, but in this case it’s going to be 25 years. That’s a lot less than the 0 a month you would have spent on a standard 10-year repayment plan.

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