School Loan Consolidation

Welcome to our School Loan Consolidation mini website. Here you will find information about how and when you should consolidate your student loans, why you should consolidate, and basic benefits to school loan consolidation.

We also provide a book store which provides an assortment of books about debt management. Browse our book store if you would like to create a further understanding of the various options which are available in terms of the quickest ways to remove the burden of your student loans.

We also provide within our navigation bar, a link to a chat room about school loan consolidation. This chat room should be useful to anyone who wants to discuss and learn from other like minded people about school loan consolidation, student loans, financial aid, and related topics.

Here you will also find current news about finacial aid for the college student with a greater emphasis on the current payment methods and any and all information about the consolidation of school loans. For the American college student who has borrowed money to achieve an education, student loan consolidation provides a viable means for saving money over the long run in terms of pay back on the loan.

School Loan Consolidation - Benefits

• School loan consolidation lets you save thousands of dollars in interest fees, if the consolidation timing is right.
• School loan consolidation allows for the extension of repayment over a longer period of time, which allows for lower payments per month.
• School loan consolidation allows for no penalties for paying off the loan early. This benefit should be used when your financial situation changes and you can afford to pay off the loan.
• School loan consolidation interest is tax deductible.
• School loan consolidation shows you are making a real effort to pay off your loan which results in a good credit rating.

School Loan Consolidation - Videos

School Loan Consolidation - Additional Points to Consider

If you are considering school loan consolidation, knowlege of the current interest rate relative to what is expected is critical. If you have a variable rate federal student loan, your interst rates will change on July 1. If the rates are expected to rise, locking in a lower interest rate by consolidating can save you a substantial amount of money.

The interest rate that you pay for your federal student loan is dependent on the 91-day Treasury-bill rate which is set the last Thursday in May. A treasury bill is a loan to the government for a period of time. It is issued by the government with maturities of 18 months or less.

The point here is that the Treasury-bill rate determines what the interest rate will be for the federal student loans. If the Treasury-bill (T-Bill) rate is high, the federal student loan rate will be high. So if the T-Bill rate is expected to go up, this means you should consolidate your student loans before the federal student loan rate goes up. Student loan consolidation is only worth it if you can lock in a lower rate compared to an expected rate hike.

By the same token, if T-Bill rate is expected to drop, and therefore federal student loan rate is expected to drop, then you would be better off consolidating after the drop in interest rate.

Interest rates on new federal student loans first disbursed on or after July 1, 2006 have a fixed interest rate of 6.8%. Federal student loans disbursed before July 1, 2006 will remain variable interest rate loans. The interest rate for these loans will re-adjust every July 1 based on the results of the 91-day Treasury Bill Auctions.

On a related note, it appears as if our federal government wants college to be more accessible to all. In 2007, the U.S. Congress approved, and the President signed into law a measure making the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college. The College Cost Reduction and Access Act provides for cutting in half the fixed interest rates on need-based federal student loans by 2011. Under the College Cost Reduction and Access Act, the fixed interest rates for student loans will continue to decrease until they reach 3.4% in 2011. A return to 6.8% will take place in 2012-13.

To conclude, school loan consolidation is simply combining your student federal loans which have a variable interest rate, into one loan with hopefully better terms. Your objective is to lock in a lower interest rate. If you can not do this, then student loan consolidation really serves no purpose. To learn about the formula used for consolidation, go to Student Loan Consolidation Rate. This site provides some detail in terms of how the new rate is derived for consolidated loans. It can not be over stated that the important advantage to student loan consolidation is to lock in a lower interest rate for the consolidated loan, before the interest rate goes up. Or to wait until the interest rate drops.

It therefore is imperative that you know what is going on in terms the federal interest rate, and what is expected. The bottom line is you want to pay your loan back while paying the least amount of interest. If the timing is right, a school loan consolidation will help you accomplish this objective.

It is also imperative to know what the current news is in terms of all aspects of financial aid for the American college student. Hence the need for our news journal. Below you will find the most current news about student financial aid, federal interest rate, school loan consolidation, and just about anything that has to do with student loans for college.