Who is consolidating student loans
That is a sizeable and unwelcome graduation gift so it’s important to know how to minimize the damage.
If the money you borrowed was all federal loans, you can find easier repayment options by applying for a Direct Consolidation Loan.
Before you consolidate, consider the following pros and cons: Note: Just remember, you must continue making payments after submitting your application until you receive notice from your servicer that underlying loans have been paid off.
You have the option to select the servicer of your choice (of which, Nelnet is an option) After your new Direct Consolidation Loan is complete, you may still add more eligible loans to your existing consolidation.
You receive a phone call from someone claiming to be an IRS agent who claims that you owe a "federal student tax." If you don't make immediate payment, the caller threatens arrest or a lawsuit from the IRS.
Refinancing vs consolidating student loans is a decision that many college graduates are making, and only one of these options can reduce your interest rates.
Consolidation is a way to make repaying student loans more manageable, and possibly less expensive.
Make sure you know what repayment plan you are on, because if you consolidate, you forfeit the benefits on some federal programs and your payment plan will switch.
You cannot un-consolidate once you consolidate with the federal program.
The words consolidation and refinancing are often used interchangeably in reference to student loans.
But there are key differences you need to be aware of to decide which option is best for you.