With tuition costs rising across the country, it has become increasingly necessary for college students to take on debt in an effort to get their degree. But student loan repayments are often difficult for students to make, especially considering that early on graduates incomes are typically quite a bit lower then their ultimate earning potential. Due to these circumstances, Student Loan Consolidation is a valuable option for many recent college grads to pursue.

How Student Loan Consolidation Works

Student Loan consolidation works like most consolidation programs. A single lender takes on the various loans you have accumulated, like Stafford, Perkins, HEAL, NSL, and private loans. While the terms and repayment conditions vary among these many different lenders, a single loan consolidation company will pay off all these loans and offer you a single, typically longer term, loan. What this means practically, is that instead of having to pay off one loan in 3 years, another in 5, and another in 10, or having one loan's interest rate be fixed and another variable, all your loans are compiled under a single system. You can then negotiate with your loan consolidation lender, about the terms of the loan. Typically, students opt for a repayment plan of 10 to 30 years. Obviously, the longer the term of the loan, the lower your monthly payment will be.

Why Consolidate?

Consolidating your student loans offers you the opportunity to stretch out your payments, so as to take advantage of your future earning power. It is quite reasonable for students to believe that they will earn more as their careers progress, and by stretching out the length of their repayments, they won't have to pay the most on their loan while their income is at its lowest point. Another benefit of student loan consolidation programs is that they take a lot of the confusion and problems out of student loan repayment. For recent graduates who have loans from a variety of public and private lenders, keeping up with the unique terms and conditions of every loan can often be a bit of a nuisance. For these reasons consolidation is a very popular option. But that does not mean that it is not without its costs.

Why Not Consolidate?

Loan consolidation of any variety, is so appealing for lenders because they can charge relatively high "consolidation" fees. While student loan consolidation is regulated better than most forms, loan consolidation companies still manage to add quite a bit to the principle of the loan (that you will ultimately have to pay back) in the form of fees. One way to avoid this is to insist that you be offered the opportunity to pay for ALL consolidation fees upfront. By doing this, you can ensure that you will at least be made aware of the quantity of charges being imposed upon you. Another problem with loan consolidation is that by extending the terms of your loans (say from 5 to 15 years) you dramatically increase the amount of interest you pay on your loans. Your interest payments on your loans accumulate over time. This means that the longer you take to pay your loan back, the more interest will accumulate. Many students fail to notice this, as they only focus on the interest rate, and not the total amount of interest that will be paid over the life of the loan.

Student loan consolidation is a valuable tool for students who want to defer their repayments until they earn more or for those who find the nuisance of maintaining many of their individual loans to be too troublesome. It is important for recent graduates to consider, however, that these benefits, despite what lenders may lead you to believe, do not come without negative tradeoffs. By being aware of both the positives and negatives of student loan consolidation, you can make more educated decisions about the whether student loan consolidation is the right solution for you.

READ MORE - Student Loan Consolidation: The Good, Bad, and the Ugly

At the time of researching your student loan consolidation information options you need to investigate the similarities and differences of graduate and undergraduate financial aid, as the costs of education today is ten times what it was less than 40 years ago and with the differences becoming even more stark when considering undergraduate versus graduate programs, as luck would have it there are resources now available to both types of student to assist them to pay for college expenses.

Undergraduate student loan consolidation information.

Undergraduates typically rely on a difficult mix of scholarships, grants and loans, these loans can sometimes be taken out by the undergraduates alone or by his or her parents alone and often a mixture of the two when the parent(s) start to become a co-borrower or co-signer, the basic schemes for students remain the unsubsidized and subsidized Stafford Loans, subsidized loans are more appealing, since the government pays the interest whilst the student is in school, however they're need-based, unsubsidized loans are not need-based making them available to a much larger range of students.

Graduate student loan consolidation information.

Graduates on another hand, often have fewer options for scholarships and grants just when tuition fees rise, however teaching and/or research assistantships very commonly make up the shortfall, however these positions in effect have very low pay rates and very long hours with the student having to attend courses and doing search for their assistantship.

In recent times a new option has become available to graduate students, the PLUS loans though the acronym stands for (Parent Loans for Undergraduate Students), they're now a means for a range of grad students, in the undergraduate situation parents are the borrowers and are responsible for the re-payment, in the case of grad students he or she become the responsible person.

PLUS loans have ample advantages.

Initially, they are available, since they are based on credit quality, not need-based a large proportion of borrowers are able to qualify, comparatively few grad students have had the time to get into the credit binds that working adults in many instances fall into and as a consequence he or she will usually have fewer bad marks on their credit report, this makes the decision easier for the college financial aid officials, who evaluate eligibility, however existing interest rates for PLUS loans aren't low by historical measures, rates are either 7.9% or 8.5% depending on the specific type of loan, even at the reduced rate on $10,000.00 borrowed the initially years interest total is over $750.00 and re-payments are required within 60 days of when the money is disbursed with no grace period.

Total amounts on undergraduate and graduate loans and for all non-private loans differ as well, even the maximum total amount over the lifetime of the program varies between undergraduates and graduates.

Both types of students will want to researching all available alternatives, nonetheless keep mindful that though it ordinarily requires combinations of funds from considerable sources, cash to pay for school is now more easily available than ever, the total amount of funds borrowed last calendar year by all students was over $50 billion, those funds are going to someone and without too much difficulty it could easily be you, if you keep this information in mind when looking at any student loan consolidation information.

READ MORE - Student Loan Consolidation Information - Differences Between Graduate & Undergraduate Financial Aid