Student Loans

Debt consolidation is using one loan or credit card to pay off multiple loans or credit cards so you can simplify your debt repayment. With one balance instead of many, it should be easier to pay off your debt and, in some cases, secure a lower interest rate from the lender. When it comes to student loans specifically, this arrangement can be beneficial if you have multiple student loans with different servicers. Student loan consolidation is available for private and federal loans.

Defaulting on a loan means you have failed to make sufficient payments for an extended period. Lenders will deem a loan in default when you haven't paid the minimum required payment for a certain number of months in a row, as detailed in your loan contract.

When a lender applies a subsidy to the interest portion of a loan on behalf of the borrower, it's defined as a subsidized loan. The lender generally pays the interest charges on the loan during certain periods. The subsidy has the effect of reducing the borrower's periodic loan payment in periods during which it is applied, thereby making loan payment more manageable, lowering the total cost of the loan, and saving the borrower money. Federal student loans are the most common type of subsidized loans.

With an unsubsidized loan, you are also responsible for paying all of the interest on the loan from the time you first receive the money until the balance is completely paid off. Any unpaid interest will be added to your total balance, which will increase the amount of ongoing interest you must pay.

Student loan forbearance is the temporary suspension or reduction of student loan payments. During a forbearance period, you're not required to pay anything toward the principal on your student loans. Interest can continue to accrue on your loans and be capitalized or added to your balance at the end of the forbearance period.

Refinancing involves replacing an existing loan with a new loan that pays off the debt of the first one. The new loan should ideally have better terms or features that improve your finances to make the whole process worthwhile. You can refinance and consolidate your student loans, allowing you to save money on interest and make payments more manageable.

In-school deferment is a temporary postponement of repayment of federal student loans that students can obtain while enrolled in school, and in some cases, for six additional months after they cease to be enrolled. It allows you to ease your financial burden while you're in school and focus on your education. 

Great Lakes Student Loans is a student loan servicer that contracts with the U.S. Department of Education. As a servicer, the company is responsible for helping borrowers manage billing and payments for federal student loans. Great Lakes Student Loans handles nearly 15% of all federal student loan accounts.

The FAFSA—or Free Application for Federal Student Aid—is a form that current and prospective college students in the U.S. must fill out to determine their eligibility for student financial aid. The FAFSA opens on Oct. 1 for the following school year, and it is best to fill it out as early as possible.

A student loan deferment is an arrangement allowing you to postpone or reduce loan payments temporarily without damaging your credit score. There are various circumstances you must be in that enable you to qualify for deferment. For example, you may qualify if you are undergoing cancer treatment or if you are an active member of the military. Deferment will make your repayment period longer, and it is important to weigh all other options before considering it.