It is possible to consolidate student loans to receive a lower interest rate, longer term, or lower monthly payments. A few major lenders issue student loans, and these lenders can consolidate student loans by paying them off and issuing you a new loan under different terms. Carefully choose whether to consolidate student loans, as you can only do this once over the life of the loan.

Consolidating student loans, just like any other types of loan, will be beneficial depending on the original terms of your loan compared to new terms. Take into consideration monthly payment amounts, variable or fixed interest rates, and under which circumstances you can defer payment. You might consult a loan advisor or online software tools to investigate how today's rates and terms compare to your current ones.

If you decide to consolidate student loans, keep in mind that you can only do this once. The Department of Education, which originally approved your loan back in college, oversees the Federal Family Education Loan Program. They will be in charge of calculating your new, potential interest rate, and approving you for consolidation.

Another reason to consolidate student loans is simply because it will be easier to repay a single, unified loan than lots of scattered ones. Perhaps you went to community college, then transferred to a university, and finally finished a graduate program at a different school. At each stage, you have accumulated different loans with different conditions, and you'll want each of them as inexpensive and convenient as you can get them. Then you only have to write one simple check each month. Direct payment plans that deduct monthly from your bank account are also available.

It's possible to consolidate student loans while you are paying them back. But you can also do it if your loan has entered a grace period where you are not actively making payments because you are a part-time student or was otherwise allowed to defer. Even parents responsible for their children's college loans are eligible to consolidate. Of course, if you can receive grants or financial aid, you won't accumulate hefty student loans in the first place.