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Loans - Direct Consolidation Loans

Loans - Direct Consolidation Loans

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Admissions Decisions
Aug 28, 2023
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Loans - Direct Consolidation Loans
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Welcome! One of the most important thing that you can do is prepare financially for the cost of higher education.

Whether you will pursue just an associate’s degree or potentially achieve multiple degrees, understanding loans is critical. The reality is that loans are likely to be at least a part of almost any financial aid package that is offered.

In order to help families understand the different types of loans, we want to provide a series on each type of loan.

Before we begin, we want to preface this by saying that no one should pursue loans. At the end of the day, loans are not free money. Loans are money lent today that will need to be repaid with interest later. If you have the opportunity to earn scholarships, grants, or otherwise mitigate the cost of college, you should strongly consider taking it.

We repeat: do not get caught in the prestige of college where you are crushed by debt.

That being said, if you do find yourself needing to take a loan, you need to do so with as much information as possible.

With that being said, we will dive in. For the purpose of this series, we will cover the following loans:

  1. Direct Subsidized Loans

  2. Direct Unsubsidized Loans

  3. Parent Plus Loans

  4. Perkins Loans

  5. Graduate Plus Loans

  6. Direct Consolidation Loans

  7. Private Student Loans

  8. Private Parent Loans

Today we will focus on Direct Consolidation Loans.

Part 1: What are direct consolidation loans?

Direct consolidation loans are not traditional loans - they are an effort to consolidate various federal educational loans into a single, new loan.

This consolidated loan has a fixed interest rate, and still has a variety of different strategies and plans for aggressively paying the loans off.

Note - you do not apply for a direct consolidation loan or receive it the way you would other types of federal loans - instead you apply for it when you have other federal loans.

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