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If youve been wondering lately "What is loan consolidation?" then you are in luck, because education loans are about to get a whole lot easier to pay off.

President Obama student loan proposals are now impacting college debt consolidation and federal loan repayment for millions of college graduates.

However, while the advantages of federal student loan consolidation are plentiful, so are the pitfalls. It is important for federal student aid borrowers to understand the risks and rewards when they need to consolidate their educational loan.

Advantage #1 - You will save time and money. No fees, simple paperwork process. No inancing decisions based on your credit rating. The new program is reportedly available only from Jan. 2012 through June 2012 will also be offering a slight deduction for selecting the automatic debit option in repaying your loan. This not only helps you make timely payments, but it also helps reduce the amount of interest youll be charged over the life of your federal direct loan.

Advantage #2 - You may improve your credit score by avoiding default. Consolidating education loan debt could be the ticket to staying current and not defaulting on your financial obligations. These types of loans cannot currently be discharged for dismissed (except for loan forgiveness programs); not bankruptcy, not by hope and prayer. Not by ignoring the threatening collection agent letters. These loans must be repaid! So by consolidating, getting a smaller monthly loan payment, and sticking to a repayment schedule consistently, over time you will pay off your debt. Federal student loan consolidation then gives you a path to resolving your financial problems related to college debt.

Advantage #3 - You will avoid frustration by only having one bill to pay each month. Having to keep track of 2 or 3 different bills each and every month can seem daunting; so, by consolidating into a new federal loan consolidation program, you will not only lower your monthly bills. Youll also lower the number of checks you will have to write and mail each month!

College was worth the price of admission. Your college degree opens many new doors to career advancement now and in the future. But now, repayment of those college loans looms large. And the new federal student loan consolidation program available for only six months by the U.S. Department of Education (Jan. 2012 - June 2012), could be the winning ticket to taking advantage of direct loan consolidation.

There are also disadvantages lurking around the edges of the new federal and private student loan consolidation programs: Some consolidation programs make you ineligible to get your loans forgiven if you later enter a qualifying career. Some federal loan consolidation programs exempt certain types of loans, and loans that were taken out at an earlier time period. Oftentimes, old loans carry a lower interest rate, so consolidating those at a higher level of interest makes no sense. Remember to compare options; your student loan consolidation rates should at the very least be better than you can get from a private federal loan consolidation program.

But the U.S. Governments Dept. of Education website now offers a variety of loan calculators aimed at helping college graduates have access to online tools aiming to help them compare loan consolidation packages and help them determine the best way for them to pay off college expenses.

The official ed.gov website is undergoing a number of updates after President Obamas student loan forgiveness plans came to light in the media. By providing comprehensive details on various ways to finance a college education, this website will ultimately offer yet another advantage to those seeking federal student loan consolidation.

While paying off these loans may never be easy, making the sacrifice and the commitment now to honor your loan commitments will pay off in other ways: You will earn the satisfaction of having followed through with one of your major financial commitments you made early in your adult life. And, you will demonstrate to yourself and to future creditors that you are an excellent credit risk.

Theore, the advantages of federal student loan consolidation are obviously a goal youll want to consider as you dig yourself out of debt.

Consolidating federal student loans is an option most graduates choose these days.

What is the reason for this?

Due to the high cost of college education today, many students are forced to take educational loans even with scholarships and grants. Naturally, after graduation, these individuals will need to repay these debts which in four years time may have piled up to frightening if not depressing amount. Whats the benefit of debt consolidation?

The main advantage to this is that your multiple loans will disappear and you only have to worry about paying in a more affordable monthly payment.

What are your options when consolidating federal student loans?

There are two programs that provide low fixed interest rates which means you dont get affected with any increase in interest rates for the duration of your repayment term. These are:

1. Federal Family Education Loan (FFEL)
2. Federal Direct Student Loan

What if you have private college loans?

There are private consolidators who can combine all your current loans together. Basically the process is the same with federal loans so you still get to pay a single monthly payment in an extended repayment period. The total amount you will be paying off to this consolidator is the sum of all college loans youve accrued during your education.

Whether you are consolidating federal student loans or private loans, you will get the same essential benefits: easier repayment method and more affordable monthly dues.

The only different is that there are privileges a federal consolidation offer that private consolidations dont. An example is the borrowers privilege to defer payment in case he decides to go back to school.

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In recent times, it has been observed that many people become victims of debt traps because of their ever-increasing needs and in many cases often need a helping hand to find their way out of their situation. In most cases, people do not have any idea as to what to do and where to get monetary aid from that will help them cope with their financial crunch.

If you are faced with major debt issues or you cannot afford to repay loans with high interest rates, then going for a government grant program might just be the right option for you provided you are eligible to apply for one.

Debt Consolidation Grants vs. Debt Consolidation Loans

Federal government grants are one of the best ways to consolidate debt. Although they arent as popular as debt consolidation loans but they are made accessible to individuals. These grants are premeditated for debt relief help.

In case you are considering getting a debt consolidation loan, then Id suggest thinking again. With free federal grant money, you can get the financial help that you need to pay off all your loans without having to pay back the principal or any interest unlike debt consolidation loans.

Different Types of Federal Grant Programs

There are several grant plans that provide different kinds of help to a wide range of individuals and businesses. Such grants are used for funding higher education, to repay debts taken to start new businesses, to pay off medical bills, and to consolidate personal debts.

One of the most popular grants for individuals is scholarship grant. These grants need not be repaid unlike scholarship loans. The only requirement to avail them is to submit report of your academic excellence to the government that awarded you the grant.

This granted money is interest and tax-free. Even if you have a bad credit history or are bankrupt, you can still apply for scholarship grant provided you are at least 18 years of age, a citizen of the US and a taxpayer.

Getting One of Free Government Grants

Several government agencies and the social service office analyze each and every grant application to make sure the money granted by the federal bank of the US to help the people goes to the needy. They do a thorough appraisal of your financial condition like your due debt amount, current income, and monthly debt payment to confirm if you are eligible for the grant. It is only after this critical evaluation that a specific grant is sanctioned.

A grant is not a gift or free money from the government. It is a financial aid provided to you on the grounds of particular duties that you, as a grantee, need to carry out after having received the granted money from the US government. You are also expected to submit progress reports on activities and projects from time to time on which The concession was granted to you.

Now that you have suffered this article, you have a good idea of the benefits of implementing a government grant. These grants are government programs that will help you live better, and proved to be an excellent tool for consolidating debt.