There are some restrictions on consolidating a consolidation loan. For example, you can not consolidate the same loan twice. In order to consolidate an existing consolidation loan, you have to add non consolidated loan to consolidation loan. You can also consolidate two consolidation loans together. But, as mentioned, single loan cannot be consolidated.

 There are some facts about student loan consolidations. For example, you cannot consolidate your student loan before graduation. In addition, educational debt or consolidating a loan are not affecting your credit rating because educational debt is considered as future investment.

 Student loan consolidation and mortgage refinancing is similar. In other words, new loan pays off the existing loans. The deals or discounts that your existing loan have are not valid for your new consolidated loan.

 Private student loans cannot attach to Federal consolidation loan programs. Some lenders over internet offer private consolidation loans for those loans. However, this often results in an increase in interest rate. Moreover, Federal loans have some advantages and you can lose them.

 So, what are the reasons that lead to consolidation? If you are having trouble with your monthly payments you can think consolidation. It can reduce your payments.

If you are paying to too many lenders every month, you can consolidate your loans. Too many lenders cause too many problems and it is also hard to follow up these payments. If you have variable interest rates on your educational loans, you can take into consideration fixed interest rate direct consolidation loans. You can also extend your educational funding and pay over long term.

According to National Center for Education Statistics, in 2007 8,986,150 undergraduate students have attended 4-years schools. In 2016, it is expected to increase 10%. 60& of these students obtained a loan to fund their education. From 2000 to 2007, avarage debt for per student has rosen 18-20%. According to 2008 data, 86% of undergraduate students had at least one credit card. It was 55%-60% in 2004.

 According to The College Board, non federal private loans were 7% of total educational loans in 1997-98, but in 2005-06 it was 23-25%. Because of these private loan terms are not favorable in contrast to federal loans, it’s share stays the same.

Source: Finaid.org (data is from NPSAS 2003 – 04)

Source: National Center for Education Statistics (table 2)