Student Consolidate.org exists to help student loan borrowers understand what it means to consolidate their student loans and whether or not this is the proper course of action for them. There will also be lots of other information regarding student loans and paying for higher education including articles about all aspects of student debt and alternative strategies for college funding, such as seeking scholarships.

The government Direct Loan program has just received a big push as it was coupled with the Obama health care bill and passed into law. With this law federal student loans will now be made directly from the government to students and will bypass the student loan companies like Sallie Mae and others. This process should save the taxpayers billions of dollars that was previously just a gift to student loan companies, and the government will use a lot of this money to increase Pell Grants to needy students. It remains to be seen how consolidation loans will be affected by this new law.

As for consolidation, this can be important for many student loan borrowers. It will probably set up payments that are more manageable, and of course you only have to keep track of one loan rather than 4 or 5 loans, for example. If you are just getting started with college and are looking at student loans for the first time, there are a few things you need to know in order to avoid financial disaster down the road.

The first of these is to realize that student loan debt can get you into serious trouble if you end up with more than you can handle. Don’t take student loans lightly and just assume that you’ll be able to pay them off. Student loan companies will lend far more money than students can pay back comfortably. They know that students have no alternative but to pay back the loans (student loans cannot be discharged in bankruptcy), and they actually make more money on loans that default than they do on loans that are paid back with regular and normal payments.

You need to know that you should avoid defaulting on your student loans, including loans you have consolidated. Unfortunately as many as 20% of student loan borrowers are defaulting at the 10 year payback point for people who have borrowed $15,000 or more, and this is not a huge amount of student loan debt. It is less than average in fact. Some of these people will be paying on student loan debt for much of the remainder of their lives, and they will be forced to pay several times the amount they originally borrowed.

Don’t borrow more than what one year of salary is expected to be in your field of work. I recently read about a young man who borrowed $75,000 to pay for college with private student loans, and his monthly payments are $1,400 per month. This is almost his entire take-home pay as a teacher earning a $24,000 salary. This young man is starting out in life with a huge weight on his back, and unless he figures out a way to earn more income or has his family bail him out, his life will be pretty miserable for years to come. This is a huge shame and a corruption of the so-called American Dream.

On this site we recommend you stay away from private student loans altogether. You may have to attend a less desirable school or stay living at home for a year or two, but so many people get into trouble with private student loans that it is best to avoid them. If you have federally guaranteed student loans you have the right to consolidate them, and the interest rate is fixed by the government. With private student loans you have no such right to consolidate, and even I you can do so, the interest rate is set by decree of the student loan company. There will be a number of articles posted on this site that offer guidelines about other ways to finance college than either federal or private student loans and/or student loan consolidations.