All American students that are studying in American schools can qualify for American student loan consolidation from the government. Whether you are a recent graduate or still in school, you are eligible to apply for federal student loan consolidation. Applying for this type of loan will lower your monthly loan payments and give you more time to repay the debt. If you have more than one loan to pay off, you can bundle them into one loan payment each month, making your debt much more manageable.

In an effort to make more students take advantage of this loan program, the U.S. government came up with different plans for students. There are 4 types of American student loan consolidation, and here is a basic list covering the benefits of each one.

Extended Payment Plan

This plan allows you more than the standard 10 year time to repay your loan, and is similar to a standard student loan consolidation plan. Generally the repayment period will be anywhere between 15 and 30 years, but will depend on the total amount of your student loan.

Standard Student Loan Consolidation

Unless you have an extended payment plan, the maximum period to pay off a student loan with a standard student loan consolidation plan is 10 years. There is a set payment amount that will be due each month, and this type of plan is ideal for people who can afford to make a set payment each month. Interest rate does not play a big role in large student loan merging plans.

Income Contingent Payment Plan

An income contingent payment plan can be quite complicated, but is basically based on your income level. It will take into consideration your income level over the course of a few years. It will also be based on your family’s annual gross income, and any other loans or mortgages that may be taken into account.

Graduated Payment Plan

Most consolidation loans are graduated or extended payment plans. A graduated payment plan is for students that are still in school, and will not be able to repay their loan until they start work after college. The payment period is the same as an extended payment plan at about 15 to 30 years, and the payments will start out low, and increase over time. The reason for this is as a person makes more money at their career, they will be able to pay more on their loan debt.