Direct Student Loans Consolidation - What You Should Know About

Most people want an excellent education. Today this is a costly prospect as the prices that colleges charge appear to increase every year. It is one thing to be able to acquire a loan for education but the headaches can begin after graduation with regards to paying back the loan or loans. If you believe that you will have problems making the repayments then it is worth considering a direct education loan consolidation.

The direct education loan consolidation program is run through the US Department of Education. As it is a government orchestrated scheme there are numerous of inherent benefits that are provided to the graduate.

Another positive aspect is that the period for paying the loan back is usually longer in duration than your previous loans. It can be anywhere as much as thirty years. To be eligible for this service you must have a minumum of one direct education loan consolidation that currently needs to be repaid. You can even amalgamate loans which have been defaulted on. Also there is no minimum fixed amount that you need to owe in order to qualify.

Presently there are four repayment plan options. It is up for you to choose which best suit your situation and requirements:

  • Standard Payment Plan: If you choose this option your monthly repayments will be no less than $50 per calendar month for between ten to thirty years.


  • Managed to graduate Repayment Plan: This differs from the standard plan in so much that your minimum payments need to be equal to the monthly interest. Often the initial payments are low after which will increase every two years.


  • Extended Repayment Plan: To be entitled to this option your debt must stand at an amount greater than $30, 000 and also you are given up to 25 years to pay it all back.


  • Income Contingent Repayment Plan: Here, the monthly repayments are calculated on the actual graduates income, loan balance, and family size.


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