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This means you’ll spend more time paying off your loans – and pay more in interest over that time.

Consolidating your federal student loans is also often a step in going on an income-driven repayment plan such as Income-Based Repayment or REPAYE.

For instance, you could target your highest interest rates first using the debt avalanche method.

Let’s start by understanding why people consolidate their federal student loans.One of the biggest reasons is the fact that consolidation simplifies your debt repayment by turning multiple loans into a single loan.If your monthly payments are unmanageable and you’d benefit from having them capped at a percentage of your income, or have already defaulted and are now rehabilitating your loans, consolidation is the way to go.All this being said, there are significant reasons to avoid consolidating your student loans (at least immediately after graduation).Loan consolidation and refinancing are often confused.

Refinancing student loans with a private lender is generally done in order to consolidate loans into one with an overall lower interest rate.

Fee-only financial planners who specialize in working with Gen X and Gen Y and helping with student loan issues can be great resources in getting this question answered.

If you’re asking, “should I consolidate my student loans? This is especially true if you’re not having trouble making your payments and you can target your repayment efforts to specific loans.

Please do your homework and let us know if you have any questions or concerns. This helps pay for our amazing staff of writers (many of which are paying back student loans of their own! When you’re approaching graduation and the prospect of repaying those loan balances – while also taking full responsibility for your post-college living expenses – any way to make loan payments easier sounds really appealing.

And if you have multiple loans to keep track of, you might be asking yourself “should I consolidate my student loans? A Direct Consolidation Loan can look like the answer to a huge problem, simplifying all your various federal loans and monthly payments into just one.

Avoiding consolidation allows you to get strategic with your debt repayment.