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by Vault Law Editors | March 31, 2009

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Congratulations, you're almost there -- three long years of law school are almost up. You've got a lot to think about as you enter the home stretch: finals, graduation, the Bar, your job search, starting your new job and repaying your student loans.

Yes, repaying your student loans. If you're like many law students you've got over $80,000 in student loans -- kind of like having mortgage, but without the house.

Here's the good news: your federal student loans are some of the cheapest and most flexible debt you will ever have. And, there are tools available to help you fit your student loan payments into your lifestyle and career goals, rather than the other way around.

One popular student loan debt management tool is the Federal Student Loan Consolidation Program. The government established the Federal Student Loan Consolidation Program specifically to help graduates better manage their student loan payments, particularly in the early years as they begin their careers. Read more about the Federal Student Loan Consolidation Program here.

Consolidation Benefits

By consolidating their federal loans, graduating students can combine their multiple federal student loans into one federal loan with a single monthly payment and lock in a single, historically-low fixed rate on their loans (currently as low 4.75%, and the fixed rate can drop even lower to 3.5%, after taking into account additional benefits offered by many consolidation lenders).

With a consolidation loan, graduating students can also reduce their monthly payments by hundreds of dollars a month by extending the repayment term to up to 30 years (the repayment term on federal Stafford loans is 10 years). Students can also choose from various "graduated" repayment plans that reduce monthly payments even further in the early years of the loan. Of course, stretching out payments means paying more interest over time, but a federal consolidation loan can always be repaid early without penalty.

Even those happy with their current payments can benefit from consolidation by directing their monthly savings elsewhere. Taking consolidation savings and paying off higher interest rate credit cards or private student loans will save money immediately.

  • Click here to sign up for Vault's no-obligation loan consolidation service.


Ask Vault's Expert

Have questions? Please drop Vault's expert, Peter Wilkniss, a line at pwilkniss@vault.com. Peter holds a BA in Economics from the University of Virginia and a JD/MBA from Columbia (with tons of student loans!). He practiced law at Wachtell, Lipton, Rosen & Katz in New York, and held senior financial management positions on Wall Street, before helping start and run a student loan company.

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