Cedar Education Evaluates the Changes to Federal Student Loan Consolidations

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Cedar Education recommends that students should first exhaust the benefits of a Federal student loan consolidation, though there are inherent weaknesses, prior to seeking a private student loan consolidation, http://www.cedaredlending.com.

Cedar Education recommends that students should first exhaust the benefits of a Federal student loan consolidation, though there are inherent weaknesses, prior to seeking a Private Student Loan Consolidation, http://www.cedaredlending.com. Federal and private student loans must be consolidated separately. They cannot be combined because of different terms, protections and conditions.

COO of Cedar Education Lending, Harvey Berkey, says, “Federal initiatives have changed the student loan consolidation landscape. Prior to 2006, Federal loans were issued with variable rates. When students consolidated their Federal loans, they could often lock in a lower rate. All Federal loans began carrying fixed interest rates a few years ago. Now, there is little benefit to consolidating Federal loans other than having a single payment and access to alternative payment plans.”

Though most repayment plans reduce monthly payments, they also often increase interest owed as a result of stretching out the life of the loan. By opting for a consolidation loan, even an income-based repayment plan will effectively restart the clock on a new repayment term.

Graduates can only consolidate their Federal education loans during the grace period or after the loans enter repayment. Federal loans can only be consolidated once, except when new loans are added. Furthermore, students cannot relock interest rates or switch lenders when consolidating federal loans.

Cedar Education Lending provides both Private Student Loans and Private Student Loan Consolidations. With increasing tuition costs and the lack of availability of Federal Aid, a Cedar Ed Private Student Loan can be a valuable resource to help bridge the gap.

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Samantha Karageorge
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