Consolidating student loans increases total repayment

As you can see, the longer the loan term, the greater the total amount repaid.

If the borrower in the above situation had also taken out an additional ,000 in unsubsidized direct federal loans to attend graduate school at the current interest rate of 5.8 percent, the differences in outcomes between repayment plans are even more dramatic (see chart below).

We’ll increase this hypothetical borrower’s adjusted gross income to ,000 at the outset, to reflect the boost in earning power they’d presumably get from a graduate degree. Table assumes borrower with ,946 in direct subsidized federal student loans at 4.3 percent interest, ,000 in unsubsidized direct federal graduate school loans at 5.8 percent, and ,000 in adjusted gross income.

1, 2007, and have received a disbursement of a Direct Loan on or after Oct. IBR for new borrowers is restricted to those who took out their first loan on or after July 1, 2014.A recent analysis found borrowers who refinanced their student loan debt with lenders on the Credible platform with the goal of reducing their interest rate, loan term and total amount repaid should expect to save ,668 over the life of their loan.Those borrowers, who had an average of ,202 in student loan debt outstanding, will realize those savings through interest rate reductions of 1.71 percentage points on average, and shorter loan terms on their new loans (about 5 years on average).Find out how much you can save in 2 minutes → To see how much you might save by refinancing with a private lender, you can compare rates offered by vetted lenders competing for your business on, a multi-lender marketplace.It takes about two minutes to compare the actual rates you’ll qualify for with multiple lenders on the Credible platform, without sharing your personal information with lenders or affecting your credit score.

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The chart below, generated by the Department of Education’s repayment estimator, shows how much $26,946 in direct subsidized federal student loans with a 4.3 percent interest rate would cost a borrower to repay under all seven different repayment plans available to federal student loan borrowers. Table is based on a borrower with $26,946 in direct subsidized federal student loans at 4.3 percent interest, and $30,000 in adjusted gross income.

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