College debt consolidation is a process by which student loans are combined into a single entity. The consolidating lender will purchase the debt from the other lenders, usually by paying off the amount owed in the borrower's name. The payment is made after the borrower enters into a new agreement with the college debt consolidation company. This may be advantageous to the borrower from both a convenience and a fiscal viewpoint.

When a student applies for student loans through the U.S. Department of Education, or through a school's financial aid office, various portions of that loan may be financed by different entities. Private banks may finance a portion of the debt. The U.S. government may directly finance a portion as well. Those who change schools may also find that their lenders change. Before long, the student could owe many different lenders. This may cause confusion and frustration.

Eliminating multiple lenders, and multiple payments each month for student loans, can be a very attractive proposition. Keeping track of one payment is far simpler than making four or five smaller payments a month. In addition, college debt consolidation provides the student with a better idea of when the entire loan package will be paid off, enabling the student to plan ahead easier.

There are numerous financial reasons why a student may find it an advantage to consider college debt consolidation. A student who is struggling to meet the monthly payment of the unconsolidated loans may need a lower interest rate. Some borrowers may also be worried about variable interest payments. In both cases, debt consolidation may be able to help.

Consolidating college debt under one lender may encourage that lender to lengthen the repayment terms, meaning lower monthly payments. The tradeoff is that the student will spend more years paying off the loan. This could help the borrower who is struggling to meet those monthly obligations. Also, if there are variable interest rates that concern the borrower, it may be to his or her advantage to choose a consolidated, fixed-rate student loan. The college debt consolidation lender can review all options with the borrower.

No matter what path is chosen, it is up to the borrower to fully understand all the terms and conditions associated with a loan before agreeing to anything. In some cases, unscrupulous lenders will take advantage of those desperate for a college debt consolidation solution. It is always recommended to check out each lender and choose one with a good reputation.