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Question for the Money Doctors

Question submitted on Jan 18, 2020.

Question

Advise on student/Fed loan consolidation.

Answer

Federal loans can be refinanced and consolidated if you'd like. In some cases, you can get a lower rate and consequently lower your monthly cash outflow. 

However, a couple of things to keep in mind.  If you consolidate or refinance with a private company, you will more than likely give up any access to federal programs like student loan forgiveness or income-driven repayment plans.  In addition,  parent plus loans expire when the parent who initially took the loan dies.  But if you refinance that loan, you will be responsible until the loan is satisfied.  

That being said, you may get a cheap enough rate on your loans for it to be worthwhile doing it.  To be sure, see a CPA financial planner for more advice and counsel on this so you don't make a costly mistake. 


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