SOURCE: NextStudent

September 13, 2007 15:13 ET

NextStudent Consolidation Loans Can Give Student Loan Borrowers up to 20 More Years to Repay

PHOENIX, AZ--(Marketwire - September 13, 2007) - A Federal Consolidation Loan from NextStudent, a leading Phoenix-based education funding company, could give borrowers with federal student loans, whether it's just one or several, more time to repay -- up to 20 more years -- and could substantially lower their monthly student loan payment. A student loan consolidation also allows borrowers with multiple federal student loans to combine them into one easy-to-manage loan with a single monthly payment.

The standard repayment period for federal Perkins, Stafford, PLUS and Grad PLUS loans is 10 years. When these loans are consolidated, the new repayment term for the consolidation loan ranges from 10 to 30 years and depends on the total outstanding amount of education debt.

In addition to student loan consolidation, federal student loan borrowers have other repayment plans and options available to them if they're having trouble making their monthly payments. To help answer parents' and students' repayment questions and keep them informed about all the repayment alternatives available to them, NextStudent offers a free online guide to repayment terms and options for federal student loans.

Besides the standard 10-year repayment plan on Perkins, Stafford, PLUS and Grad PLUS loans, borrowers can talk to their lender or servicer about qualifying for these other repayment plans that could lower their monthly payment:

  • Extended Repayment allows borrowers to extend the standard repayment period up to a 25-year repayment term, depending on the student loan amount and date the student loan was obtained.
  • Income-Sensitive Repayment bases the monthly payment amount on a borrower's monthly income.
  • Graduated Repayment allows borrowers to start with a lower monthly payment and then gradually increases the monthly payment amount over the repayment term.

Borrowers also have options for temporarily postponing their payments altogether without affecting their credit rating if they meet certain criteria:

  • Undergraduate and graduate borrowers who are enrolled at least half time can request an in-school deferment on their student loans so they don't have to make payments while they're in school.
  • After they leave school or drop below half-time enrollment, all Stafford and Perkins borrowers receive a grace period (six months for Stafford loans, nine months for Perkins loans) during which no payments are due, before they have to begin repaying their student loans. There is no grace period for Federal Student Loan Consolidation, PLUS or Grad PLUS loans, although Grad PLUS borrowers can postpone making payments while they're still in school at least half time.
  • Once they're in repayment, borrowers who are having trouble making their monthly payments can request a forbearance or, in cases of unemployment or financial hardship, a deferment. Deferment and forbearance periods allow a borrower to temporarily postpone making payments and can be requested for up to a year at a time. In such cases, borrowers are entitled to a total of three years of deferment (not including in-school deferments) and three years of forbearance.

With Perkins and subsidized Stafford loans, any interest that accrues during a grace period or deferment is paid by the government. For PLUS, Grad PLUS and unsubsidized Stafford loans, any unpaid interest that accrues during a grace or deferment period will be added to the principal loan balance for the borrower to repay once repayment starts or resumes. In a forbearance period, accrued interest on any federal student loan, whether subsidized or unsubsidized, must be paid by the borrower. Borrowers can always choose to make interest payments during any of these postponement periods in order to avoid having any accrued interest added to their principal loan balance.

Borrowers who have any questions about consolidating their student loans or about repayment plans and options can contact NextStudent, where they'll be assigned their own personal student loan advisor. The student loan advisors at NextStudent are helpful and knowledgeable about student loans and are a trusted source in getting borrowers the information they need.

About NextStudent

NextStudent, Federal Lender Code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services, including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation programs, and college savings plans.

For more information about NextStudent and its student loan programs, please visit the NextStudent website at

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