Student Loan Consolidation Fees

Q: I am a recent college graduate considering student loan consolidation. I am aware that I need to keep my private student loans and federal student loans separate for the consolidation, but I am just wondering if there are any student loan consolidation fees or costs associated with consolidating student loans?

A: You should never pay an up-front fee or cost for student loan consolidation. In some student loan consolidation circumstances, fees will be deducted from the disbursement check, but you should never have to pay an up-front fee or cost. If a lender is requiring that you pay them a fee up-front for consolidating your student loans, it is a fairly good chance that the service is a scam.

For private student loans, if you received a fee waiver or rebate from your original student loan lender, you should check to see if you will have to repay that fee should you consolidate with another lender (some may consider this a fee or hidden cost of consolidation).

It is also important to note that any accrued and unpaid interest on unsubsidized student loans that are being included in a new consolidation loan could be capitalized at the time of consolidation (some may consider this a fee or hidden cost of consolidation). For more on student loan consolidation please view: Consolidate Private and Federal Student Loans, Compare Student Loan Consolidation and Best Student Loan Consolidation Tips below.