Consolidating student loans for a lower interest rate
While having repayment flexibility can be a major benefit to keeping your federal loans where they are, there can be some danger involved with frequently switching plans, especially when choosing among the income-driven plans.By overly relying on these plans and using them as a sort of financial crutch, you could find yourself paying back your loans for far longer than you had hoped.In fact, student loans are such a hot topic right now that they are a frequent, if not focal, point of discussion in the 2016 presidential primary debates.Interns from around the city protest near the Senate steps to urge the Senate to act on a House passed bill, Smarter Solutions for Students Act, which would prevent student loan interest rates from doubling.
The biggest advantage to keeping your student loans with the federal government is repayment-plan flexibility.
Politicians aren't the only ones listening, either.
Due to the notoriety and overwhelming amount of outstanding student debt, financial technology start-ups looking to address the issue have emerged.
When you consolidate your federal student loans, the interest rate on your new consolidation loan will be roughly the same as the combined rates on your current loans.
What this means: Your interest rate will not go down, but it also won’t go up by much either.