Cost of the Consolidation Option for Student Loans.

摘要

The federal government's student loan programs for higher education convey substantial financial benefits to borrowers because of their broad availability and favorable terms. They offer: - Interest rates that are independent of a borrower's credit status and typically several percentage points below those on purely private loans; - Deferred repayment of the debt while the borrower is in school; and - An option to convert from a variable interest rate to a fixed interest rate, usually on more favorable terms and with a longer period until maturity. Of the various provisions included in a federal student loan contract, the option to consolidate individual loans contributes greatly to a borrower's benefits and the cost of the program to the government and taxpayers.