Remember that loans which are not subsidized have interest which will accrue while you are in school, and the principal amount at repayment will be higher than when the loans were originally borrowed. Various deferment and forbearance options are also offered. You may contact the lenders for more details on forbearance and repayment options. Many lenders also offer repayment incentives to encourage on-time payments. Consolidation involves having a lender purchase any outstanding federal loans from all other lenders and make a new loan, carrying a new interest rate, and a loan period ranging from 10 to 30 years.
Consolidation can occur at any time during the borrower's grace period or repayment.
There is no fee to consolidate your federal loans. Alumni take advantage of consolidated loans in order to lower monthly payments. However, the total interest cost on loans with repayment periods greater than ten years is higher than those with ten-year repayment periods. Many lenders also offer other programs to reduce loan payments in the first several years after graduation. These programs include income contingent repayment, interest only payments and various graduated repayment options.