November 21, 2008, Newsletter Issue #95: When Not To Consolidate Your Loans

Tip of the Week

Before you apply to consolidate all of your student loans into one monthly payment, be aware that there are times when it may not be worthwhile. You need to consider what benefits you will lose through consolidation. Many student loans have special borrow benefits already applied that will not transfer to your new student loan debt consolidation. Interest rate discounts or rebates to the student loan principal may be lost. In addition, when you consolidate college loans if you are adding a Perkins Loan to the mix, you could lose the any loan forgiveness options that are available. Weigh carefully your new monthly payment against the potential lost benefits.

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