You can only consolidate your federal student loans once you leave school. Student loan consolidation involves combining your existing student loans into one policy to make a single monthly payment.
Likewise, you cannot refinance private student loans while still in school. Refinancing involves getting a new private loan to pay off your existing private or federal student loans. Most private lenders require a bachelor’s degree to qualify for refinancing, although some may approve borrowers who left school without a degree.
Consolidation may be a convenient solution if you want to make lower monthly payments because of the extended time it allows you for repayment. However, you won’t necessarily get a lower rate because it depends on your consolidated loans. Consider your options as soon as you qualify for student loan consolidation.
When Can I Consolidate Student Loans?
You can consolidate your federal student loans as soon as you leave school. Once you leave school by any means, you trigger a six-month grace period to give some leeway before you enter repayment. You can still consolidate your student loans once this grace period lapses.
Meanwhile, parents who took out parent PLUS loans to help finance your education can consolidate such loans while you’re still in school. Parent PLUS loans are Direct PLUS Loans, making them eligible for a Direct Consolidation Loan.
What Can I Do About My Student Loans While Still in School?
You can slowly get rid of your debt by paying off student loan interest even if you cannot consolidate your student loans while studying. Student loan interest accrues daily (unless your loan terms state otherwise) while you’re in school.
By the time you leave school, you may face hundreds of dollars in interest on top of the principal amount you borrowed. As such, paying off student loan interest may help lower your total balance as soon as you leave school and enter the repayment period.
There is no downside to paying off student loan interest. There’s no need to worry about prepayment penalties on federal or private student loans. If your budget allows, consider making interest payments while still in school to lower your total monthly costs during your repayment period.
So, Can You Consolidate Student Loans While Still in School?
No, you cannot consolidate student loans while in school. Only your parents can consolidate their parent PLUS loans while you’re in school. You can only consolidate your student loans once you leave school after graduation or due to other reasons.
Relatedly, you cannot refinance your private student loans while still in school because most lenders require a bachelor’s degree to qualify for refinancing. You also need a high credit score to get the best refinancing rates, which you may only access once you start building your credit outside of school.
However, you may pay off your student loan interest while still in school. Making interest payments helps you save hundreds of dollars once you enter the repayment period after you leave school. Consider your budget if you intend to make interest payments while studying.