Student Loan Consolidation is one of the greatest financial tools that a graduate (or a graduate's parents) can use to their advantage. Federal student loans represent some of the cheapest loans that individuals can get (they even carry a lower interest rate than mortgages).
Most federal student loans carry a variable interest rate that will never exceed 8.25%. However, from year to year these rates can fluctuate quite a bit. Interest rates in 2005 are at or near historic lows, and all signs point to risinng rates in the future.
Student Loan Consolidation programs consolidate the student loans into 1 fixed rate that represents a weighted average of all of the loans that the you currently hold. Typically, the programs allow you to extend the repayment period of the loans, and will reduce the interest rate for people that demonstrate on-time payment, a strong credit history and allow for direct debit from their bank accounts.
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