In School Student Loan Consolidation (Consolidation while Enrolled)
Most people find out about student loan consolidation once they have completed their education or left the program of study. While consolidating student loans once they have entered or surpassed their grace period is good, a financially-conscious student will consider the option of in school student loan consolidation. The process is generally the same for students as it is for former students, but there are more benefits with in school student loan consolidation.
Consolidation Basics
You need to understand what consolidation is before you start on the paperwork to take out a loan. An in school student loan consolidation program is a way to take advantage of low interest rates and create an easy repayment situation for yourself when you graduate.
You can consolidate all of your federal or private student loans into a single payment that is deferred until after you graduate. In addition to a smaller monthly installment, your repayment term can stretch anywhere between 10 and 30 years depending on the amount of the loan and your income. With the way that interest rates fluctuate (usually on the increasing end), you stand to save a good deal of money in repayment and have an extended term for installments.
Enrolled Consolidation
In school student loan consolidation is best for students who anticipate a great deal of debt. It can be from a large loan or several smaller loans that amount to a large debt. You need to have a good understanding about the process before you start to consolidate your loans.
- You should understand that when you consolidate your loans while enrolled you forfeit your grace period on the loans. This means they become due immediately following the end of your education or your departure from school.
- You will have to send your lender(s) a letter to let them know that you personally waive your right to a grace period and immediately start repaying your consolidation loan.
- Only fully disbursed loans (ones that the school has received in full) can be consolidated.
- You have to be enrolled at least half time to qualify for in school student loan consolidation.
- While you are enrolled you have to fill out a form to defer your loan payments or you will begin receiving bills.
- You will have to file deferments during each summer during your education when you are not enrolled full time so that your loans will not go into repayment.
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