My Experience with Student Loan Consolidation

- - Consolidation, Student Loans

“Consolidate your loans…everybody is doing it.”


Ever since I graduated college, I knew that my student loans were not going to be manageable. Really though, how do you pay almost $700 a month when you are working at the family restaurant around the corner?! I was always complaining about the payments and never really felt connected to my debt. I was just the victim, it’s all the government’s fault. Blah, blah, blah.

About 6 months after my repayment period began, I decided that consolidation was the path to freedom for me.

The only thing I knew about consolidation was that it was going to help me manage my payments better. I would no longer have to pay $680 a month towards my loans. The pressure to pay so much when I was making so little was going to go away.

I didn’t know that my interest rates would change, or that my repayment period would be extended. Heck, I don’t even think I realized that this wasn’t really saving me any money either, that I was just reorganizing my debts. These things seem so obvious to me now and I would love to go back and shake my 21 year old self until I read the agreement, or did ANY research into what I was doing.

It wasn’t the end of the world, but I could have picked much better timing to consolidate and gotten lower interest rates. I’m not extremely upset over it, it’s just one of those “woulda, coulda, shoulda” moments.

That’s why I want to share my story in hopes that it helps at least one of you along the way.


What My Consolidation Looked Like

When I decided that I was going to write this post, I knew I was going to have to pull out the paperwork and see what exactly I had done. I was actually pretty nervous about going through my files to find my consolidation paperwork. It was the first time I’d actually felt scared about knowing the truth. I had no idea what I was going to find since I honestly didn’t give the whole process of consolidation much attention at the time.

When I finally got the courage to find the paperwork, it wasn’t as bad as I thought it was going to be. Keep in mind that I was only able to consolidate the federal loans I had. There weren’t any places I could find that would consolidate private loans a few years ago. I’m sure there were a couple but I never found them…thankfully.

Here is what my federal student loans looked like prior to consolidation:


Loan #               Type              Balance         Interest Rate

1                      Subsidized           $904.40           2.47%

2                     Subsidized            $957.54            6.80%

3                     Subsidized            $4,902.01       6.00%

4                    Unsubsidized        $1,906.67        6.80%

5                    Subsidized              $4,015.84       6.80%


Here is what I ended up with after everything was consolidated:


1                      Subsidized             $10,650.53       6.25%

2                      Unsubsidized        $1,878.70         6.25%


I did screw myself out of a pretty great interest rate with the smaller loan, but that loan wasn’t such a huge amount so I’m not kicking myself too hard. (Keep in mind – I didn’t actually save money even though the newer amounts were slightly lower. This process took a while and you were expected to make payments during that time).


How long does it take?

Consolidation is a pretty long process. When you apply they need a lot of information about your current loans, your other debts, and all of the personal mumbo jumbo you would expect them to ask. They also have you select a repayment plan (standard, graduated, etc.).

Looking at my promissory note, it was signed on October 11th, 2011, meaning I probably filled out the application that day.

On January 5th, 2012 I received a note from them thanking me for applying for consolidation. It asked me to look over the loans listed to make sure I wanted to consolidate all of them, and that there were none left out. It also said my loans would be consolidated within 10 days if I did not contact them to make any changes.

20 days later I received my consolidation confirmation letter showing the new interest rate and loan ID numbers.

This process took more than 3 months from start to finish for me.


What’s the big deal?!

I guess the thing I’m most upset with myself over is the fact that my repayment plan got so much longer by me not digging in and paying the $680 each month. I was making ends meet, I wasn’t starving and unable to pay my rent. I was just a stubborn kid who felt like $400 needed to be allocated each month for alcohol and having a good time.

If I would have kept making those high payments, my loan balance would be $1200 and I would have been done paying my federal loans this December…..

I’ll call that a $6,000 mistake. 


Say whaaaa?




Words of Advice

If you haven’t consolidated, make sure you know exactly what you’re getting into. It’s not a one size fits all program. If you aren’t someone who will stay motivated to get out of debt and make the extra payments that will keep you from being in debt until you’re 50, the higher minimum payments might be the right choice.

This was definitely the issue I had. I always told myself I’d make the extra payments when deep down I knew that they wouldn’t be my first priority. Who knows, if it weren’t for you all keeping me accountable for getting my debts paid off, I’d probably be slacking off here and there today too. No one is perfect. You just have to know enough about yourself and your habits to make the right decision for you.

Getting out of debt is the main goal here, so make sure you aren’t putting yourself deeper in the hole just to have some temporary/false relief. Be honest with yourself – are your payments really too high, or are other aspects of your budget set much higher than they should be?



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I am Chenell Tull and so far, I've had a pretty rough time with my student loan debt. Recently, I've figured out a more productive "get out of debt" plan and the goal is to pay off over $60k in just 36 months. If you want to learn more, subscribe to the mailing list and get FREE updates on my successes and failures on this journey out of debt.