Extension BannerStudent Loan Consolidation

Rosemary K. Heins


The graduation season is approaching.  Those graduating from post-secondary training may be thinking about the upcoming student loan payments and whether they should consider consolidating.

Federal student loan consolidation allows you to combine one or more federal student loans into a new loan.  Private loans can be consolidated but they cannot be consolidated with federal loans.  With consolidation, you will have one lender and one monthly bill, making it easier to manage. 

You can no longer consolidate federal student loans while you are enrolled in school.  You can, however, consolidate any loans that are currently in your grace period, which is 6 months from the date you graduated, in repayment or deferment.  So the optimal time to be looking into consolidation is soon after graduation.

If the student loans are from private lenders, they may have a consolidation option available, too.  However, be sure note if they charge origination fees to process the loan.  These could be substantial so make sure the benefit of consolidation doesn’t outweigh this cost!

Find out more about student loan consolidation at www.loanconsolidation.edu.gov. You may also have information and help available from the university or college financial aid office.

Developed by Rosemary K. Heins, University of Minnesota Extension, April 2010