Graduating with Student Loans Part III – Consolidating Loans

If you have decided that consolidation is right for you.  It is important to understand that you can consolidate your student loans for free. One of the biggest scams in student loans are companies that consolidate your federal student loans for you and charge you a fee.  These companies charge $200, $400, or even up to $800 to consolidate your federal student students.  Depending on your student loan payment each month that could be several months worth of payments.

Most federal student loan can be consolidated together.  The most common type of federal student loans are the Subsidized Federal Stafford Loan, Unsubsidized Stafford Loan, Perkins Loans and Graduate PLUS Loans. Loans from your undergraduate and graduate programs can all be consolidated together as well.  Consolidating your federal student loans is easy and free.  It can be done online at

There are five sections to the loan consolidation application process.

1. Choose Loans & Servicer
2. Repayment Plan Selection
3. Terms & Conditions
4. Borrower & Reference Information
5. Review & Sign

But wait! We haven’t talked about selecting your repayment plan. Do not consolidate yet! Our final part in this series is going to discuss student loan repayment options. Generally, you will want to wait until after you have graduated but before your grace period has expired to consolidate.  The grace period on your Stafford Loans is 6 months and Perkins Loan is 9 months and it is a period where you do not pay on your student loans.  Look for our final part in this series next week.

If you have not already, sign up for SALT to learn more about student loans, scholarship opportunities, and other money matters topics at  Join us next week as we discuss your student loan repayment options!


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