There are several different Student Loan Consolidation programs available for financial aid; the one that you pick will depend both on the types of loans you have received and what school you attend.
The Private Student Consolidation Loan is for students who have gotten private loans from non-government sources; just as your loans were from loan companies, you will consolidate your loans with a private company, not the government. The advantage of this is that you get to choose what company to consolidate your student loans with, which will allow you to shop around for the company with the best deal.
The Federal Student Consolidation Loan is for loans that you have taken from the government, such as the Stafford and Perkins student loans. Two different Federal Student Consolidation Loan programs exist, and what school you attend determines what one you will be able to use.
Also, note that you shouldn’t combine both federal and private student loans into one consolidation loan. By doing so, you will lose the low interest rates and other benefits you will have with federal student consolidation loans. Therefore keep them separate.
Stay tuned for my next posts that will discuss these different student consolidation loan options in detail, and show how they can be a helpful/harmful form of financial aid.
Jan 6, 2009
