Undergraduate students, graduate students, and the parents of students can look to lenders, credit unions, and the federal government for help if they want to simplify their debt. A wealth of student loan consolidation experts are available to guide students and parents through the act of putting all of their student loans together into one lump sum with a reduced interest rate. This helps students and parents to significantly reduce the number of bills they have to pay each month. It is also a fantastic way to manage finances and begin the process of getting their monthly payments under control.

Federal student loan consolidation allows all active student loans to be compiled into one manageable monthly payment. If a student qualifies for federal student loans, then he or she also qualifies for federal student loan consolidation. This includes Stafford loans, Perkins loans, PLUS loans, Direct loans, HEAL, SLS, Health Professional student loans, NSL, and Guaranteed Student loans. Whether the recipient of a loan is the student or his or her parents, they can look into student loan consolidation. All loans must be consolidated separately, however. In July of 2006, a new provision maintains that married students are no longer allowed to lump their student loans together for the purpose of consolidation. An individual's loans must be consolidated separately.

Consolidation becomes a viable option only after the repayment period for a loan or loans has begun, or during the inherent grace period. Students are no longer able to begin consolidating their loans while they are still attending college. Parents however can begin to consolidate their PLUS loans at any time. As long as the repayment plan is satisfactory, loan recipients are also able to consolidate student loans if the loans are in default.

Both parents and students have to consolidate their student loans with a lender who is different from the one who loaned them the initial student loans. Doing so allows them to receive a lower interest rate and substantially more savings. Generally, lenders require a minimum balance for loan consolidation. Federal and private student loans have to be consolidated separately. This is because federal loan consolidation usually offers better advantages and lower interest rates. Interest rates are determined by averaging the current rates of the loans which will be consolidated and rounding the answer up to one-eighth of a percent. The interest rate can go up if a borrower extends the terms of the loan's repayment plan.

Federal loan consolidation requires no credit checks but the period of repayment is usually longer. In general, consolidating federal student loans results in lower monthly payments, because the loan period is extended from ten years to anywhere between twelve and thirty - it all depends on the amount of the loan.

Federal student loans and private student loans cannot be consolidated into one big loan. They are entirely separate loans and have to remain separated even in matters of consolidation. The primary benefit of consolidating private student loans is the borrower's ability to receive a single payment a month. It is entirely possible that the monthly amount will be lower, as the act of consolidating resets the entire student loan period. Any private student loan which has been consolidated will likely have a higher total interest rate, since it has to be paid out over a longer period of time. When deciding to consolidate student loans, the recipient of the loan should research which consolidation companies offer variable or fixed interest rates, what any penalties may be, and what kinds of fees are charged.