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Do you really know why you think you want to consolidate?
By: Genevieve Dobson

Back around 2004/2005 consolidation of Federal loans was a no brainer.  You were taking a variable rate loan and locking it into a rate of around 2.875%.  Plus if you did your research there were companies out there that were offering even further reductions if you signed up for automatic withdrawal (ACH) and made so many on-time payments.  This meant you could get an interest rate as low as 1.625%.  Who wouldn’t consolidate their loans with this rate?

Well times have changed.  Since 2007 interest rates have been fixed at 6.8% (on average) and private lenders who once funded federal loans have gone away so there are no borrower benefits to decrease the rates.  Instead anyone who has taken out loans since then have Department of Education as their lender although this can be confusing seeing companies like Sallie Mae, Great Lakes and Nelnet among others were hired by the Department of Education to Service these loans.I discuss how consolidation of federal loans may no longer be a viable option in my recent video.  Make sure you go and check it out:

Ultimately the reason for the importance of understanding this is to know that what once was a no brainer now is not financially advantageous.  Its crucial to look at the other options available to handling student loan debt so that you make wise choices about your debt.  Dont forget that Degrees of Success offers free assessment regarding your debt. Just go to our website at to make an appointment for your free assessment today!