Time to run some numbers...
$120,000 in student loans with three different interest rates.
$50,000 in Perkins at 5% interest rate,
$40,000 in Stafford at 6.8% interest rate,
$30,000 in Graduate PLUS at 7.9% interest rate.
The weighted interest rate would be the amount of each loan divided by the total loans borrowed multiplied by the original interest rate:
$50,000/$120,000 = .41667 * 5.0% = 2.08%
$40,000/$120,000 = .3333 * 6.8% = 2.27%
$30,000/$120,000 = .2500 * 7.9% = 1.98%
Average weighted interest rate = 2.08% + 2.27% + 1.98%= 6.33%
Now that you know about how much you will owe and what your monthly payment looks like, you may be interested in learning about the Public Service Loan Forgiveness Program (PSLF).
Congress created the Public Service Loan Forgiveness Program to encourage individuals to enter and continue to work full-time in public service jobs which includes working at many hospitals, medical schools, and other health care facilities. Under this program, borrowers may qualify for forgiveness of the remaining balance due on their eligible federal student loans after they have made 120 payments on those loans under certain repayment plans while employed full time by certain public service employers.
Other Loan Forgiveness Programs:
A few years ago, consolidation was a very important topic for student borrowers. However, this is becoming less so since the federal government has recently decided to be the lender of all federal student loans. Finaid.org's loan consolidation webpage has important loan consolidation information for your review. Here are some important points:
Resources on student loan consolidation:
studentaid.ed.gov, Loan Consolidation- Consolidating your federal student loans can simplify your payments, but it also can result in loss of some benefits.
finaid.org, Student Loan Consolidation- Information on student loan consolidation
Federal Direct Consolidation Loan- Department of Education's official webpage on federal Direct loan consolidation