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The Student Loan Consolidation Program enables anyone with more than $20,000 in outstanding Federal student loans (including PLUS loans) to reduce monthly student loan repayments and lock in a low fixed interest rate. One way to save money and get a low payment is to consolidate your loans while you are in your grace period. Loans consolidated during grace receive a .6% reduction in the interest rate over what you would receive if you wait until you go into repayment to consolidate.
Federal Student Loan Consolidation also offers the ability to reduce your monthly payment for the first 2 years of repayment with a graduated repayment option. This option allows you to; essentially, pay only the interest that accrues on your loan for the first 2 years.
You may also want to consider the interest rate environment. The interest rate on your federal student loan consolidation will directly affect the monthly payment. Over the last 3 years, the Department of Education has raised interest rates every year, for a total of 3.85%. Consolidating today ensures you will not be subject to any further interest rate increases on your variable rate loans from the Department of Education.
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