Article by Maxwell Thompson

Federal direct loan consolidation is beneficial for people who have a great deal of debt and many more years to pay it off. Direct Loan Consolidation is available from the Federal Government and is available to borrowers who a) currently have an outstanding balance on a Federal Direct Loan, b) have outstanding FFELP loans but attended an institution that participated in Direct lending, or c) apply for FFELP consolidation but cannot find an acceptable income based repayment plan for their new FFELP consolidation loan.

With a Direct Consolidation Loan, borrowers can switch repayment plans at anytime. With only one lender and one monthly bill, it is easier than ever for borrowers to manage their debt. You can get a Direct Consolidation Loan during your grace period, once you have entered repayment, or during periods of deferment or forbearance. It is important for you to get all the facts about consolidation loans before making your decision to ensure that you make the best decision for your situation.

Borrowers can eliminate the need for dealing with multiple lenders, extend their repayment period and calculate loan payments based on a percentage of income. Direct Loan Consolidation is available for all Direct loan borrowers. If borrowers have exhausted the deferment options on their current Federal education loans, a Direct Consolidation Loan may renew many of those deferment options. Those who are out of school and do not have a DL but do have a Federal Family Education Loan (FFEL) can get a Direct Consolidation Loan if they cannot obtain a Federal Consolidation Loan from a FFEL lender or cannot get one with acceptable income-sensitive repayment.

With ACS consolidated student loans, borrowers can choose to repay the loan amount before the term expires without experiencing any changes. Whether selecting a private or federally supported consolidation loan, refinancing options for each loan is equally available to students, and as time goes forward, many graduates find more than ample impetus to refinance consolidated student loans. The decision to refinance consolidated student loans is a crucial step in maintaining financial stability when newly entering the workforce following graduation. For those refinancing consolidated student loans, terms will vary depending on previous consolidation agreements.

Typically, consolidated student loans require smaller monthly payments than the original loans. If you determine if your consolidated student loans can be deferred you can still make even small payments to help reduce the principal and interest owed. The lower monthly repayment on a consolidated student loan is due to a lower, fixed interest rate applicable after consolidation and, often, a longer repayment period. The College Opportunity for All Act would eliminate loan-origination fees, permit borrowers to reconsolidate previously consolidated student loans, eliminate the so-called single-holder rule for loan consolidation, and raise the maximum Pell-grant award to $ 11,600 by 2011.

Despite the fact that Direct Loan consolidation is a Federal program, there are various lenders that serve as go-betweens and can offer additional interest rate reductions. A Federal direct loan consolidation is basically a consolidation in which the federal government acts as the lending company. The best way to find a lender to refinance a consolidated student loan is to complete a quote form online. In essence, consolidated student loans are the best loans that a student can get.

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