Re consolidating federal student loans
It can also be a way to get into repayment plans you otherwise wouldn't be eligible for.1. One of the myths of consolidation is that it makes your debt less expensive by lowering your interest rate.
Historically, that may have been accurate, since consolidation was often used as a way to lock in a low interest rate on variable-rate loans, says financial aid expert Mark Kantrowitz.
Private loans tend to have higher fees and interest rates than federal government loans.
Private loans also do not offer the opportunities for cancellation or loan forgiveness that are available on many federal loan programs.
Managing all student loans can be stressful and may even lead to mistakes like missed payments.
Whether you’re taking out a new student loan or consolidating existing education loans, the Federal Trade Commission (FTC), the nation’s consumer protection agency, and the U. Department of Education (ED), the agency that oversees federal student loans, want you to know how to spot potentially deceptive claims or business practices some private companies may use to get your loan business.