What are the best student loan consolidation options?

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Question by Shawn: What are the best student loan consolidation options?
I have some $ 50K in student loan debt, which is defaulted, and in Colorado and New Mexico, across several loans.

What are my options as far as consolidation goes? Are there non-profits that could help the interest stop? Will I be eligible while they are in default or do I need to get them out of default first?

The current asking payment rates on my loans total about 40% of my income and are not feasible at this time.

Specific names and websites of agencies that can provide assistance would be appreciated.

Best answer:

Answer by Joanna
A Direct Consolidation Loan has a fixed interest rate for the life of the loan. The fixed rate is based on the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of 1%. However, the rate will not exceed 8.25%.

Reqquirements to consolidate a loan?
Here are some tips on qualifying for a Direct Consolidation Loan:
You must have at least one Direct Loan or FFEL Program loan that is in a grace period or in repayment.
If you want to consolidate a defaulted loan, you must either make satisfactory repayment arrangements on the loan with your current loan servicer before you consolidate, or you must agree to repay your new Direct Consolidation Loan under the Income-Contingent Repayment Plan or the Income-Based Repayment Plan.
Generally, you cannot consolidate an existing consolidation loan again unless you include an additional Direct Loan or FFEL Program loan in the consolidation. However, under certain circumstances you may reconsolidate an existing FFEL Consolidation Loan without including any additional loans.

Hope this a help!
God bless!

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