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Student Loan Consolidation Program
The US's Federal financial aid programs
The federal government is the biggest provider of financial aid.
Actually, the federal government gives 75% of total available student
aid, according to the College Board.
The biggest and most known federal student aid programs are:
- Federal Perkins Loans
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grants (FSEOG)
- Federal Parent Loan for Undergraduate Students (PLUS) Loans
- Federal Stafford Loans
- Federal Work-Study Program
Federal student loan consolidation
One peculiarity in the contributions by the US Department of Education
is the federal student loan consolidation program.
Different other forms of federal student loans, federal student
loan consolidation is a loan issued after the graduation of the
student , with the propose of extending the repayment term of
federal student loans. Despite the fact that this is more costly
for students in the long term, initially it saves them money by
making smaller the monthly payment size, what is essential for students
who are unable to meet considerable financial responsibilities right
after finishing school.
For instance, a student with twenty five thousand dollars in federal
student loans at 3.375 percent would have a payment around two hundred
forty five a month for 10 years before consolidation, and an projected
payment of one hundred forty three dollars a month over twenty years
after consolidating.
The privileges of regular federal student loans are retained by
the Federal Consolidation loans, like the power to cancel payment
for up to thirty six months due to economic adversity, or postpone
payment if the student starts studding again.
Reimbursement
Reimbursement terms are governed by the total amount owed. Typically,
this is:
Fifteen years for $0-$20,000
Twenty years for $20,000-$40,000
Twenty Five years for $40,000-$60,000
Thirty years for $60,000+
Reimbursement rates are calculated on the presented student loan
rates at time of application. Students can find out their loan information
using the US
Department of Education National Student Loan Database System (NSLDS).
Federal Student loan rates are set each July for the next year supported
on the sale price of the 91-day Treasury Bill in the May's last
auction.
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