federal goverment student loans consolidation (Government)

Federal government.

The options for borrowers, in bankruptcy, for student loans have shrunk to a very few. Bankruptcy Code changes, in late 1998, have made student loans non-dischargeable. This is regardless of age of the loan, unless the borrower establishes substantial hardship. In 2005, code changes included private student loans, as non-dischargeable.

Loans.

The federal goverment student loan consolidation program is offered by the US Department of Education. Unlike other forms of federal student loans, federal goverment student loan consolidation is a loan issued after the student graduates. It is used as a means of extending the repayment term, of federal government student loans.

This is more expensive for students, in the long term. However, it initially saves them money, by reducing the monthly payment size. This is important for students unable to meet significant financial obligations, immediately after graduation.

For example, a student with US$25,000 in government student loans (debt) at 3.375% has an estimated monthly payment of US$245 for 10 years before consolidation, and an estimated monthly payment of US$143 over 20 years after consolidating.

Federal consolidation loans retain the privileges of regular federal student loans (debts). This includes the ability to suspend payment, for up to 36 months due to economic hardship. Plus, it allows deferring payment, if the student goes back to school.

Application Procedure:

Fill out a Federal Consolidation Master Promissory Note request (http://www.StudentLoanConsolidator.com).

Repayment:

Repayment terms are governed by the total amount owed. Typically, this is:

15 years for $0-$20,000
20 years for $20,000-$40,000
25 years for $40,000-$60,000
30 years for $60,000+

Repayment rates are based on existing student loan rates, at the time of application. Students determine their loan information using the US Department of Education National Student Loan Database System (NSLDS) (http://www.NSLDS.ed.gov/).

Federal Student loan rates are set each July, for the following year. It is based on the sale price, of the 91-day Treasury Bill, in the last auction of May.

Private Financial Aid programs.

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