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How to consolidate federal student loans for free

By Jan Miller

For the Deseret News

Published: Thursday, July 10 2014 12:42 p.m. MDT

Debt-relief agencies are charging borrowers big money to consolidate their federal student loans. In truth, federal loan consolidation is a free right that the government offers to all borrowers, and it can be done quickly in four easy steps.

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Most student-loan borrowers do not realize they can consolidate their federal loans for free, and debt-relief agencies across the U.S. have taken full advantage of this fact.

They’ve been charging borrowers expensive closing costs and monthly fees, while claiming that consolidating federal student loans is something that’s too difficult to attempt alone and can only be done through their agency.

In truth, federal student-loan consolidation is a free right that every student-loan borrower has, and it can only be done through Federal Direct Consolidation Loans.

No matter who consolidates federal loans within the federal system for the borrower, it must be processed through the Direct Loans main website, www.studentloans.gov. This means that any debt-relief agency promising to consolidate student loans must go complete the consolidation application at the same website as if you were to do it yourself.

Read the instructions below to learn how any borrower can consolidate her or his federal student loans — for free — through Federal Direct Consolidation Loans.

1. Make sure to have your student aid (FAFSA) pin number. If you do not know it, go to www.pin.ed.gov and click on “Request a duplicate pin” in the left hand column. Follow the instructions provided.

2. Go to www.studentloans.gov and click “Sign In” at the top left of the page.

3. Once signed in, scroll down on the left hand column, and look for the “Repayment” tab. Directly underneath it is a link that says Complete Direct Consolidation Loan Application and Promissory Note.

4) Click that link, and click “Start Application.”

Most of the application is simply personal information (i.e. address, date of birth, social security number, driver’s license number, etc.).

Additionally, federal student-loan debt information will auto-fill automatically; there is no need to look up loan balances or interest rates.

To prepare for the application, simply have two references handy, as the borrower will need to input each one’s name, address, telephone and email. These references can be family members, but they cannot reside with the borrower.

Remember, there is no need for any borrower to give his or her money away to a debt-relief agency to complete the federal student-loan consolidation application for him or her. The federal government established consolidation as a free right that every borrower has, and it should be honored as such.

The application is quite simple, and if there are questions a borrowers do not understand, they can always call Direct Loans at 1-800-557-7392. They will help, for free, as much as is needed.

Jan Miller is a national student loan consultant, financial industry expert & president of Miller Student Loan Consulting. He creates custom repayment strategies that fit with every borrower's budget & life. EMAIL: info@student-loan-consultant.com

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