Rules for consolidating student loand
Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.
C."That new loan will have its own interest rate; it will have its own repayment terms; it will have its own terms and conditions," she says.
The primary difference between the two loan programs is that the Department of Education originates loans under the FDLP and private lending institutions originated loans under the FFELP.The last section is dedicated to identifying the best private consolidation loans for those with a few different financial profiles.There are two types of consolidation loans: federal and private, and they each come with distinct advantages and drawbacks.It takes borrowers an average of 21 years to repay their student loans, while 28% of students are in default (or miss payments for 270 days or more) within five years of entering repayment.
The picture painted by these statistics is clear: many borrowers are in over their heads with student loan debt and are looking for relief.Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.