The Four Varieties Of Federal Student Loan Consolidation

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If you are a student in the USA, then you are eligible for federal student loan consolidation from the U.S government.

Whether you may be a working student, a present student without a job or a fresh graduate, you can take advantage of the different types of federal student loan consolidation plans.

There are two benefits when you fill out a student loan consolidation application and watch it get approved – first, you reduce the payment amount each month for your student loans, and second, you are given more time to pay them off.

So if you are currently trying to pay off more than one student loan, you can use federal student loan consolidation to combine everything into one single loan payment, which is much easier to pay down.

Defining The Four Types of Federal Student Loan Consolidation

In an attempt to convince more students to opt for student consolidation loans, our government has four separate types of these loans designed to suit each student’s specific needs.

Standard Student Loan Consolidation

The premise of this loan is simple – you can request a loan for up to ten years with fixed payment per month. This type of plan is suitable for students who can afford to pay a fixed amount per month. Even if the student consolidation loan amount is quite large, the interest rate normally does not figure in much.

Extended Payment Plan

This type of plan is similar to standard student loan consolidation except it has a longer repayment period of between 15 to 30 years. The student loan amount determines the terms of the repayment period.

Graduated Payment Plan

This type of plan is suitable for students still schooling and can only repay the student loan when they have a job after they graduated. The payment period is between 15 to 30 years. Another reason why the term is apropos would be the fact that the payment amount tends to steadily increase every two years. The intent is the as the student has worked for a longer period of time, their salary will increase accordingly and thus able to pay a larger repayment student loan.

Income Contingent Payment Plan

This is probably the most complex of the different payment plans and is predicated on the student’s income over time. Other factors used in computing the payment amount would be the gross annual income of the student’s family, liquid assets, mortgages, other loans, etc.

Most student usually choose graduated payment plan or the extended payment plan for their federal student loan consolidation.

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Article Citation
MLA Style Citation:
Horowitz, Richard "The Four Varieties Of Federal Student Loan Consolidation." The Four Varieties Of Federal Student Loan Consolidation. 8 Feb. 2012. uberarticles.com. 17 Apr 2012 <http://uberarticles.com/finance/loans/the-four-varieties-of-federal-student-loan-consolidation/>.

APA Style Citation:
Horowitz, R (2012, February 8). The Four Varieties Of Federal Student Loan Consolidation. Retrieved April 17, 2012, from http://uberarticles.com/finance/loans/the-four-varieties-of-federal-student-loan-consolidation/

Chicago Style Citation:
Horowitz, Richard "The Four Varieties Of Federal Student Loan Consolidation" uberarticles.com. http://uberarticles.com/finance/loans/the-four-varieties-of-federal-student-loan-consolidation/

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