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Weigh the pros and cons

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Consolidation has both benefits (pros) and drawbacks (cons):

  • Allows you to combine multiple student loans together so you only have one loan payment and loan holder
  • Can lock in a lower, fixed interest rate if the variable rates on the loans you wish to consolidate are due to increase
  • Can extend your repayment period from the standard ten years, lowering your monthly payment
  • Can result in a higher interest rate
  • Can increase your total cost of debt (you pay more interest)
  • Might lose eligibility for certain types of deferment
  • Might lose eligibility for certain cancellation or forgiveness programs. This is especially true if you consolidate Perkins Loans, at which time you lose your eligibility for the following loan forgiveness provisions:
    • Education Component of Head Start Program Staff Member
    • Law Enforcement or Corrections Officer
    • Nurse or Medical Technician
    • Professional Provider of Early Intervention Services for the Disabled
    • Public or Non-Profit Child or Family Services Agency Employee
    • Vista or Peace Corps Volunteer

Be sure consolidation is right for you! If you're not certain, talk with the holder of the loans you wish to consolidate.