Consolidating your student loans starview 2 updating

The Higher Education Reconciliation Act of 2005 repealed this provision, effective July 1, 2006, because of problems that occurred when the married borrowers subsequently got divorced.There was no way to unravel the joint consolidation, so the joint consolidation loans became a tie that binds beyond divorce.Instead, several lenders offer private consolidation loans for consolidating or refinancing private student loans.

(A parent who has a Parent PLUS Loan borrowed to pay for a child’s education and a Direct Loan borrowed to pay for the parent’s education may consolidate those loans together.) Previously, married borrowers could consolidate their loans together.The interest rate on a federal consolidation loan is a fixed rate equal to the weighted average of the interest rates on the federal education loans that are being consolidated, rounded up to the nearest one-eighth of one percent.For example, suppose a borrower has a ,500 loan at 3.4% and a ,000 loan at 3.86%.Federal consolidation loans allow borrowers to combine several federal student loans into one loan to streamline loan repayment.The monthly payment amount may decrease because repayment can be spread over a longer time period.

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