Loan consolidation

While federal consolidation student loans are backed by official support no such support exists in case of the private student loan consolidation process. In case of such federal loans the Government takes the responsibility of repayment to the lender when the student is unable to pay for reasons beyond his or her control.  Of course the Government will get the amounts repaid by the student but only when they are in a position to do so. 

Lenders are also more at peace with the federal loan consolidation process since they are assured of the repayments.  Ordinarily the banks are such lenders and they are assured about getting back the money they have invested. That is why the federal loan rates are normally lower than the private loan rates.  Read more...