Student Loan Consolidation

I recently consolidated my student loans through the Department of Education online and, since the process went smoothly, encourage you to do the same. Given that the average American student graduates with $18,900 in loans (Nellie Mae, 2003), I thought some of you might benefit from consolidation.

I originally requested information about loan consolidation last year via phone and in return received a gaggle of forms that I could not fill out by myself (I didn't have all the information required in my possession). I let the paperwork fester around my apartment for a year before attempting the online route (due to increasing federal interest rates), which I found to me much more manageable.

To complete the online paperwork, you'll need a PIN number. You can request one here:
http://www.pin.ed.gov/PINWebApp/pinindex.jsp
Your PIN will give you access to all your loan repayment records, which you'll need to complete the consolidation forms. If you already have a PIN but don't regularly use it, you may be asked to confirm your information.

Once you have your PIN, go here and begin the application process:
http://www.loanconsolidation.ed.gov/borrower/borrower.shtml
Be sure to follow the directions, read the FAQ and understand all system requirements. I wouldn't recommend completing your consolidation forms on a public computer (sorry) because you have to send a lot of personal data.

The most convenient part of the experience was logging on to the student loan Web site, checking real-time data on every single loan I owe - twelve, to be exact - and then just pasting the numbers onto the consolidation screen. The whole process probably took 45 minutes.

Last week I received confirmation in the mail that my loans have been consolidated with an interest rate of 3.5 percent - not bad! I've locked in that rate for the life of the loan, no matter what happens with federal interest rates come July.

If you have the time, loans and a personal computer, I highly recommend consolidation. One final tip, never consolidate with a third-party company, no matter how many mailings they send you. And don't be fooled by companies with names like "Federal Consolidation." The government can give you the cheapest interest rates available - NOBODY can go lower - so why even mess with those companies?

Now that I've settled the matter of loan consolidation, I'm moving onto credit cards. I never did complete my New Year's resolution to obtain a joint AmEx or Discover Card with my boyfriend to pay bills and I am acutely aware that my Citibank Card still holds a 14.5 percent interest rate because I paid late twice in the past two years.

Until next time, friends....