Changing Federal Laws Are a Catalyst to College Student Loan Holders Seeking Loan Consolidation
The federal Deficit Reduction Act that President George W. Bush recently signed into law will raise the rates college students and their parents pay for education loans. The bill will cut nearly $12 billion from the federal student loan program over the next five years. Many will see their variable interest rates on current loans rise as soon as July 1.
College Loan Consolidation Programs Change Due to the Debt Reduction Act
The act eliminates in-school and “super-two-step” consolidations – Currently, Direct Loan borrowers may consolidate any eligible college loans that have been fully disbursed even if the borrowers have not yet entered a repayment or grace period (i.e., the student borrower may still be in their in-school period when consolidating). The “super two-step” was the ability of students to refinance a consolidation loan by consolidating out of Federal Family Education Loan Program (FFELP) into Direct Lending, then back out of Direct Loans to a Federal Family Education Loan Program (FFELP) loan.
Federal Government Helps College Graduates Consolidate College Loans
To make sure you repay student loans, you can consolidate or refinance them into one much lower payment. Take advantage of this 100% free program and drastically reduce your student loan payments. Click here to see if you qualify.
What is a Consolidation Loan and How Does Refinancing Help Pay for College Loans?
A consolidation loan is just what it sounds like: You can take two or more outstanding loans and refinance them into one. As with the Stafford Loans, there are both Direct and FFEL consolidation programs. To a college grad swamped with multiple student loans that have come due, loan consolidation is an enticing option. When you consolidate, a lending institution pays off your existing balances and replaces them with a new, consolidated loan.
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