Disadvantages of consolidating student loans
However, before you are heading down the road of debt consolidation, you have to educate yourself about everything about a student loan debt consolidation.
If like most of the college graduates, you also have numerous student loans; chances are that you have already come across the term, student loan debt consolidation.
There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. Department of Education (ED) or ED’s consolidation loan servicers. Once your loans are combined into a Direct Consolidation Loan, they cannot be removed.
You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The loans that were consolidated are paid off and no longer exist.
However, before you are finalizing your decision, you have to consider the advantages and disadvantages that have been mentioned above.
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. Similarly, if you have Federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you should not include your Perkins Loans when you consolidate.
Discuss the following drawbacks when deciding if consolidation is right for you: Be sure to weigh the positives and negatives of the choice to consolidate defaulted student loans before making a decision.
However, both advantages, as well as drawbacks, are associated with consolidating the student loans. Content Header .feed_item_answer_user.js-wf-loaded . An average college graduate student is known to leave school with almost 000 of withstanding debt.Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.