Charity attended community college before Illinois State to reduce her college costs. She is financing her education with a combination of state and federal grants, student loans, and work study. Charity is confident her hard work will pay off.

“The important thing is to get here, even if that means taking out loans. I know with a bachelor’s degree I’ll be more marketable as an employee. The increase in my income will take care of my debt,” Charity said.

She recommends looking beyond the Financial Aid Office for gift aid to reduce college costs.

-Charity M., Bloomington

Loan Consolidation

Consolidating student loans locks in a fixed interest rate for the life of the loans. Even if you did not borrow from multiple sources, you can still consolidate and lock your interest rate.

Consolidated interest rates are based on the weighted interest rate average of your current loans. You can estimate your consolidation loan monthly payment by using the online calculator at the Federal Direct Consolidation Loans Web site – click "Borrower Services". Many private lenders also offer online calculators.

If you borrow additional loans, these can be added to the original consolidation loan as long as you do so within 180 days of the disbursement of the consolidation loan. However, the interest rate might increase because it will be re-calculated to include the rate of the newer loans.

To determine if consolidation is right for you, it is best to contact the lenders directly and ask them the following questions:

Do you have any interest rate reduction programs and what are they?
If I don't use auto debit to make loan payments, how many days after the date due is considered a late payment?
How much is the fee for a late payment?
If I am eligible to cancel a portion of my loan through employment, will this benefit be retained in the consolidated loan?

Contact Direct Loan for more information on the Direct Loan Consolidation. Also, check out available private lenders.

Note: If you have a Perkins Loan, it is sometimes best to exclude this loan from consolidation depending on your future employment plans. Perkins Loan borrowers can be eligible for cancellation of their debt if they work full-time as teachers (in low-income schools, special education, or certain subject areas), nurses, or in law enforcement/ corrections. The requirements for cancellation are listed on the Perkins promissory note.