If you've been wondering lately "What is loan consolidation?" then you are in luck, because education loans are about to get a whole lot easier to pay off.President Obama student loan proposals are now impacting college debt consolidation and federal loan repayment for millions of college graduates.However, while the advantages of federal student loan consolidation are plentiful, so are the pitfalls.It is important for federal student aid borrowers to understand the risks and rewards when they need to consolidate their educational loan.Advantage #1 - You will save time and money.No fees, simple paperwork process.No refinancing decisions based on your credit rating.The new program is reportedly available only from Jan.2012 through June 2012 will also be offering a slight deduction for selecting the automatic debit option in repaying your loan.This not only helps you make timely payments, but it also helps reduce the amount of interest you'll be charged over the life of your federal direct loan.Advantage #2 - You may improve your credit score by avoiding default.Consolidating education loan debt could be the ticket to staying current and not defaulting on your financial obligations.These types of loans cannot currently be discharged for dismissed (except for loan forgiveness programs); not bankruptcy, not by hope and prayer.Not by ignoring the threatening collection agent letters.These loans must be repaid! So by consolidating, getting a smaller monthly loan payment, and sticking to a repayment schedule consistently, over time you will pay off your debt.Federal student loan consolidation then gives you a path to resolving your financial problems related to college debt.Advantage #3 - You will avoid frustration by only having one bill to pay each month.Having to keep track of 2 or 3 different bills each and every month can seem daunting; so, by consolidating into a new federal loan consolidation program, you will not only lower your monthly bills.You'll also lower the number of checks you will have to write and mail each month!College was worth the price of admission.Your college degree opens many new doors to career advancement now and in the future.But now, repayment of those college loans looms large.And the new federal student loan consolidation program available for only six months by the U.S.Department of Education (Jan.2012 - June 2012), could be the winning ticket to taking advantage of direct loan consolidation.There are also disadvantages lurking around the edges of the new federal and private student loan consolidation programs. Some consolidation programs make you ineligible to get your loans forgiven if you later enter a qualifying career.Some federal loan consolidation programs exempt certain types of loans, and loans that were taken out at an earlier time period.Oftentimes, old loans carry a lower interest rate, so consolidating those at a higher level of interest makes no sense.Remember to compare options; your student loan consolidation rates should at the very least be better than you can get from a private federal loan consolidation program.But the U.S.Government's Dept.Of Education website now offers a variety of loan calculators aimed at helping college graduates have access to online tools aiming to help them compare loan consolidation packages and help them determine the best way for them to pay off college expenses.The official ed.Gov website is undergoing a number of updates after President Obama's student loan forgiveness plans came to light in the media.By providing comprehensive details on various ways to finance a college education, this website will ultimately offer yet another advantage to those seeking federal student loan consolidation.While paying off these loans may never be easy, making the sacrifice and the commitment now to honor your loan commitments will pay off in other ways. You will earn the satisfaction of having followed through with one of your major financial commitments you made early in your adult life.And, you will demonstrate to yourself and to future creditors that you are an excellent credit risk.Therefore, the advantages of federal student loan consolidation are obviously a goal you'll want to consider as you dig yourself out of debt.

Receiving the college degree of your choice using a student loan can mean new challenges upon graduation.Of course, you had the intelligence, hard work and drive through all those years.Now you have your degree and you are looking for a career that will pay you well enough to repay all your student loans.You education should give you an edge amongst your fellow job applicants.As a side benefit it strengthens your place in the society.And of course, it also reaffirms your financial responsibility to pay off all your student loans.If you are looking into arranging repayments for multiple student loans, it is time know how to consolidate student loan debt.If you are bit skeptical about merging all your existing student loans into one account, then knowing the many benefits it can bring into your financial management will surely help.Once you consolidate student loan debt, there are three C's that you will be able to satisfy. convenience, cost management, and credit score.Prior to any loan consolidation, you will have to deal with arranging regular monthly repayments with several lenders.Each lender has their own set of due dates, their specific minimum due date and different payment methods.Since they are separately managed, you have to make sure that each and every payment is successfully remitted in a timely manner to avoid a negative credit score.Once you consolidate student loan debt, you no longer have to prepare separate monthly repayments to all your lenders.From the operative word 'consolidate', these loans will be merged into one account, allowing a more systematic and efficient payment remittance and collection from both the borrower and lender, respectively.The effect of the loan consolidation also leads to the protection of your credit rating because of the fact that there will be no missed payments due to neglect or confusion.You only have one payment to arrange.So that provides safety and convenience.How in the world does consolidating your student loans lead to efficient cost management? Just with the simple fact that a loan consolidation may involve locking in a lower interest rate or even allow deferred payments in times of emergency.In addition another possible benefit when you consolidate student loan debt is that you may be able to defer loan payments until you get a job.You should take note that there are different terms and conditions with regard to the consolidation of each student loan you carry.Basically federal student loans are backed by the United States' Department of Education, while private student loans are funded by privately owned financial institutions.Because of the difference in the funding source, there are also many significant differences in ways how to consolidate them into one loan package.You need to do your homework and study each of your loans so that you can make an educated decision when comes to consolidating your loans.Difference in interest rates, length of the loan, early repayment penalties and other details are important considerations when consolidating your student loans.Failure to do so could create long term financial consequences.