Consolidation

From the time you enter college, you will begin receiving mail encouraging you to consolidate you student loans. Before you jump to consolidate, you should look closely at what student loan consolidation is to determine if it is the right decision for you.

Keep in mind that normally you will not be able to consolidate your loans until after you graduate or withdraw from school.  If you choose to consolidate your loans, you may be able to extend your repayment period from 10-25 years up to 30 years.  This will reduce you monthly payments but will greatly increase the total amount of interest you will pay to the consolidation lender.  There are other pros and cons to consider as well:

Consolidation Pros
  reasons to consolidate:
     Reduce monthly payments with an extended repayment period.
     Make just one payment to one lender servicer each month.
     There is no charge to consolidate.
     Lock in a low fixed interest rate.

Consolidation Cons
  reasons not to consolidate
     Prolongs the life of your loan.
     Forfeit original repayment incentives.
     Possible elimination of deferment options.
     Potential loss of grace period.
     Possibly pay more total interest over extended repayment period.
     Potential loss of loan forgiveness option under Stafford and Perkins

Be An Informed Borrower

Check with your current lender to see if they offer loan consolidation.
While you are no longer required to consolidate your loans with their original lender, you should be very cautious about responding to consolidation solicitations.

Review solicitation materials carefully.   
Some consolidation companies send very official looking correspondence that may resemble the Department of Education documents.

Determine the actual lender of the consolidation loan. 
It is best to deal directly with a lender who will own and service your loan for the duration of repayment, not a marketing company or call center that will sell your loan to a third party.

Delta State works with a variety of lenders who provide quality customer service and sound borrower benefit programs.