According to an article in the Star-Telegram , student loan repayment plans and student loan forgiveness programs just became more beneficial to students while student loan consolidation may not be such a good bet for now.

The article said:

Federal student loans made after July 1, 2006, are at a fixed rate that cannot be changed in consolidation, said Mark Kantrowitz, author of FastWeb College Gold and founder of the Web site The fixed rate for 2008-09 federal student loans is 6 percent. And in any event, few lenders are offering the service, experts say, despite historically low interest rates.

Usually student loan debtors use consolidation to lower their rate; but it seems that this option may not be as beneficial at this point. However, student loan repayment options have been expanded to allow much lower payments, in some cases as low as $0 a month for the income-contingent repayment program which has a loan forgiveness component after 25 years.

The repayment program is limited to students who have high debt relative to income. The formula is complicated…[but] Basically, if you earn under 150 percent of the poverty level, you would pay nothing. Most who qualify will pay less than 10 percent of their total income for their loans. After 25 years of payments, any remaining debt is forgiven.

They have also expanded the Public Service Loan Forgiveness program which now includes almost any job in government service, nonprofits or teaching. Any student loan debtor who works in a qualifying job and pays their loan for 10 years will have the remaining balance forgiven. Also, both the income-contingent repayment program and the Public Service Loan Forgiveness program can be combined. So, technically you could work for 10 years paying very little per month towards your student loan AND have the balance forgiven after 10 years. To find out more about the repayment/loan forgiveness programs visit .