However, student loan consolidation is a great way to reduce the number of payments you have to make each month, reduce the amount of money to devote to student loan repayment, and put you on safer financial ground. With multiple student loans, you run an increased risk of missing a payment, which can have a negative impact on your credit rating.

Student loan consolidation can make your student loans easier to manage, no matter how much or little you're making. In addition, you can improve your credit score by reducing the number of outstanding loans you have.

You can consolidate all of your Federal student loans and your parents can consolidate student loans taken by your parents on your behalf. You can also consolidate private student loans. You just can't consolidate these two types of loans (Private and Federal) together.  By consolidating Federal student loans, you can retain all of their benefits, extend the repayment period if you want to, and reduce your interest rate at the same time.

You can receive some benefits with private student loan consolidation, but you'll likely pay a higher interest rate than you will on Federal student loans. Private student loans are not subject to the same guarantees that Federal student loans are. One benefit of private student loans, however, is that the interest you pay on student loans, Federal or otherwise, is tax-deductible, provided you make less than $65,000 for single filers or $130,000 for joint filers.

Typically, student loans that are in default are not eligible for a student loan consolidation with any lender. If your loan is in default, you must return it to a "performing status" before it will become eligible for consolidation. To "reform" a defaulted student loan, you must make timely payments on the loan for a period of nine consecutive months or more.

If you are considering a student loan consolidation, shop around to see which lenders will offer the best rates and terms. At this time a lot of the big lenders such as Sallie Mae, NextStudent, Nelnet, etc. have suspended their federal loan consolidation programs until further notice so, it may be a good idea to wait a few months if you can. Make sure you read and consider all terms carefully before you sign.

Please check back for updates on the Student Loan Consolidation blog.