Consolidating government subsidized student loans
A subsidized loan is desirable to the borrower because the government makes interest payments while the beneficiary is still in school; a subsidized loan will save money at the expense of the government.
On the contrary, an unsubsidized student loan is less desirable because no government interest payments are made which makes the loan more expensive to the borrower.
The Federal government offers a variety of low interest loans specifically designed to meet the needs of college students struggling to meet the rising costs of a post-secondary education.
Their loan programs currently include the Federal Perkins Loan, Federal Direct Subsidized and Unsubsidized Loans for undergraduate students, and Federal Direct PLUS Loans for graduate and professional degree seeking students.
Through this program, students can replace their multiple monthly expenditures with a single lower monthly payment.
The majority of Federal student loans are eligible for consolidation under the Federal Direct Loan Consolidation Program.
Although the program existed since then, it was not until President Obama’s budget in 2010 switched all new student loan lending over to the Direct Loan program.
Starting with federal student loans, two different types of federal loans are available: subsidized and unsubsidized loans.Three of them are Federal student loans and two of them are private. Here is what you need to know about consolidating and refinancing your Federal and private student loans together.