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Should I consolidate my loans with ACS student loans?

I completed my undergraduate and started making payments on my two federal loans as soon as the grace period was over. However, I'm now seeking a student loan repayment program that will ease my monthly deductions. I want to save as much as I can and supplement with the best private student loans so I can enroll in graduate school. From what I’ve read online, I don’t qualify for student loan debt relief. So I thought, why not consolidate them instead? Is it wise to consolidate them with ACS student loans?

Frank Nichols

in Student Loans

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Melissa Norris on May 3, 2018

You can consolidate your student loans through ACS if you want to lower the amount of the monthly payments you are currently making. ACS is a loan servicer for both government and private student loans. They provide help with student loan management in a comfortable and accessible way.

Though you can do it independently through the U.S Department of Education or ACS can guide you through the process. Direct Consolidated Loan is the only plan available for consolidating federal student loans. In this case, the federal government pays off all your existing lenders and gives you one new loan. However, you will not get lower interest or save money through consolidation.

ACS helps you consolidate your loans under the Government-set terms. It will help you calculate your new fixed interest rate for the merged loan by calculating the weighted average and rounding it up to the next one-eighth percent. The interest must not be more than 8.25%, and there are no hidden costs charged for loan consolidation.

Significant factors the government evaluates before consolidating your loans:

  • The number of loans you are repaying.
  • The interest charged on each of the loans.
  • The monthly sum you pay to service each of your loans.
  • Other financial obligations apart from student loans.
  • How many repayments you need to make to service your loans entirely.
  • The number of lenders you currently owe.

Benefits of loan consolidation:

  • You get to make only one lower monthly payment.
  • A single fixed interest rate.
  • You can choose a new payment plan from additional student loan repayment programs available.
  • Further forbearance or deferment chances.
  • Protects your credit score.

Cons

  • You may pay more interest fees over the life of the loan. The most common consolidation plan can take up to 30 years to finish repaying your loan. Thereby, you will pay more interest in total even if you are paying a little every month.
  • You may lose federal loan benefits.
  • New graduates may lose their grace period.
  • The new deal is permanent.

Student loans debt relief for federal loans is impossible on the grounds of financial constraints or bankruptcy. They must be paid (except for exceptional circumstances such as disability, death, people working as a teacher or in the public service).

While you look for funding for graduate school, why not apply for Unsubsidized Stafford Loans from the federal government rather than search for the best private student loan?

Ronald Miller2 years ago

Consolidating federal student loans with ACS (now known as Conduent) has a few different terms other than what the government looks at (as mentioned). For example, your payment period is primarily determined by the amount of money you have borrowed. If you borrowed $10,000 or below, your payment period may not exceed ten years.

However, if you borrowed above $60,000, you may repay your loan for even 30 years. Remember that the longer you have to repay your loan; the more interest you will pay as it will have accumulated for a longer time.

Since you have already been paying for your loans, it is essential to consider the time you have left to service the loans. If it is less than five years, I would not advise you to consolidate as you will lengthen the burden of maintaining a loan and also pay more. Instead, consider exploring other repayment plans or deferment.


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