The Four Types Of Federal Student Loan Consolidation

If you are an American student or one studying in an American school, then you are eligible for federal student loan consolidation from the U.S government.

Federal student loan consolidation plans are applicable for all students whether you are still in school or a recent graduate or already into your new career.

If you are successful in your student loan consolidation application, it will help you to reduce the student loan payment amount each month and/or allows you more time to pay off your student loans.

If you currently have several student loans, it is easier if you use federal student loan consolidation to consolidate them into one loan payment thus making it easier to manage.

The Four Types Of Federal Student Loan Consolidation

The U.S government in a bid to attract more students to take up their student consolidation loans have come up with four plans to suit the different needs of students.

They are:

1) Standard Student Loan Consolidation

The maximum student loan period is 10 years and the payment amount per month is fixed. This type of plan is suitable for students who can afford to pay a fixed amount per month. The interest rate would not be a big factor in huge student consolidation loans

2) Extended Payment Plan

This type of plan is similar to standard student loan consolidation except it has a longer repayment period of between 15 to 30 years. The repayment period is dependent on the student loan amount.

3) Graduated Payment Plan

This type of plan is suitable for students still schooling and can only repay the student loan when they have a job after they graduated. The payment period is between 15 to 30 years. The payment amount per month usually starts low and increase steadily every 2 years. The intent is the as the student has worked for a longer period of time, their salary will increase accordingly and thus able to pay a larger repayment student loan.

4) Income Contingent Payment Plan

This type of plan is complicated and is based on the student’s income level over a period of years. It is also based on the family’s annual gross income, other loan amounts owed, other assets, mortgages etc.

Most student usually choose graduated payment plan or the extended payment plan for their federal student loan consolidation.


By Ricky Lim

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