Consolidating private student loans direct loans
These are clearly great programs for people who choose careers in public service or education, but if that’s not you, they won’t do you any good.
There are also a number of federal loan repayment plans that can ease the burden for borrowers facing tough economic times.
Consolidation was previously available to borrowers while they were still in school. Congress also eliminated joint consolidation for spouses, effective July 1, 2006.
(see box below), You can consolidate during grace periods.
Similarly, the Teacher Loan Forgiveness Program is available for teachers who work in schools that serve low-income families full-time for five consecutive years.
And if you do qualify, but you’re at the high end of the spectrum, your slightly lowered payments may come at a through the refinancing process won’t make sense for every borrower, but it provides great benefits for some.
Now that you know it’s an option and you understand how it works, you can better assess whether it’s right for you.
For example, the government’s Pay As You Earn (PAYE) and Income-Based Repayment (IBR) programs allow borrowers to make reduced monthly payments based on financial hardship.
But if your income is over a certain threshold, you won’t benefit from these programs.
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Learn more about when to consolidate and refinance federal and private loans.