The United States Congress recognizing the need to revamp student loan consolidation has sought to revolutionize the same through a consolidated Federal Loan consolidation Program (FLCP). This article will discuss some of the more salient features of the FLCP, its limitations, drawbacks, as well as provide the reader with reference sites.

Consolidating Student Loans: Background Information

Student loans cost consumers nearly as much as a housing loan, did you know that? It is not uncommon to find undergraduate student loans costing $125,000 and graduate studies student loans costing more than $175,000. This coupled with long payment terms and higher interest rates mean the actual money loaned can be only half of the total payment to be made to consider the payment as full payment.

Prior to the FLCP student loans had variable interest rates that were affected by several factors, some of which are; the amount loaned, installment payments, loan terms, etc. This meant that a consumer who takes out a student loan may end up paying for student loans for 10 to 30 years, or more if allowed by the lender. And the interest rate usually goes up as the loan progresses, making it unbearably burdensome for a consumer to continue paying student loans.

The FDCP was given the authority to change the interest rate from variable to fixed effective February 1999. This may have increased some payments in the short term but has made student loan payment in full more feasible. The congress was seriously considering consolidating control of student loan consolidation into to the FDCP but the 2008 financial crisis stalled the entire process.

Consolidating Student Loans: Rationale

A student loan is supposed to allow a consumer with limited means to finish undergraduate and/or graduate studies and then pay for the same using the job or profession made possible by the education. However the previous student loan model buried students in debt for 10 to 30 years with little chance of actually paying the same in full and living within the median standards of living. Student loan consolidation made full payment possible without taking out too much from the consumer\’s wages. This allowed not only the letter of the law but the spirit of the same to be given full effect.

Consolidating Student Loans: Reference Material

To better understand student loan consolidation one has to start with the FDCP website, the Department of Education website. Government Accountability Office website (GAO), etc. Of particular note is the article GAO-06-195 which provides a more detailed discussion of the importance of government intervention on student loan consolidation.

Consolidating Student Loans: Types of Student Loan Programs

There are different types of student loan programs, some of the more important one\’s are the following:

1. Stafford Loans: Refers to student loans for those enrolled in recognized and authorized American institutions of higher education.

2. PLUS Loans: A loan offered to the parents of students who are enrolled in programs, with eligible post-secondary institutions. And to graduates students and/or professional students of postsecondary institutions.

3. Federal Perkins Loans: A loan for those who are in need of post-secondary education financial aid.

Are you looking for more information regarding Consolidating Student Loans? Visit http://www.consolidatingstudentloans.eu today!

Are you looking for more information regarding Consolidating Student Loans? Visit http://www.consolidatingstudentloans.eu today!

Author Bio: Are you looking for more information regarding Consolidating Student Loans? Visit http://www.consolidatingstudentloans.eu today!

Category: Finances
Keywords: student loans,loan consolidation,student loan