Loan Consolidation is done with the help of private institutions as well as by the Federal Government. In the case of Federal student loan, the existing debts are purchased & closed by a debt consolidation company or by the United States Department of Education. This primarily depends on the type of Federal low interest loan that a student holds. The interest rates for student loan are based on annual rate in United States. These rates can be anywhere between minimum of 4.70% to maximum of 8.25% for the Federal Stafford loans and 9% for the Plus loans.Here are some essential tips to consolidate student loans with lower interest rate· The current US consolidation program allows the students to consolidate once with the private lender and then re-consolidate again only with the Department of Education.Re-consolidating does not change the rate of interest.· In case the students combine the credits of different types & rates into one new consolidated amount, they can enjoy a weighted average calculation that would establish an appropriate rate based on the current interest rates.· This process is something like refinancing, but the key difference is that the interest rates do not change in this case.· Taking up loan consolidation services is better. The private lender charge lot of fees.· It improves the student’s credit rating for the future as well.· It reduces the actual amount of your monthly payments significantly and simplifies the finances.· Some of the options that you can take up are Federal Stafford, Perkins, Parent PLUS, Government Direct Credits, etc.· They help you save your time that you can further invest in earning or studies. They share a major chunk of your responsibilities like documentation, etc. hence keep you relaxed.