Education, as important as it is, costs money and unfortunately these days, good education often means more money spent. You or your parents may have saved money for your college education but most often than not, you still have to take out federal student loans in order to cope up with the high costs of college education. Before you graduate, you may have more than one, each with its own interest rate, payment schedule, and structure. To manage your debts more efficiently, you need to consolidate all of it into one, with its own consolidation rate.Consolidation means grouping your disparate debts into one loan and making a single payment to a consolidation company with a preferably lower the consolidation interest rate. There are two federal programs that are available nationwide, the Stafford and Perkins Programs. Under these two programs, there are several other types of financial assistance programs existing. It is normal for a student to graduate from university with various student loans. When interest drops and when you want to simplify payment, it is best to think about consolidating your debts. But do this only after careful deliberations because there are pitfalls to consolidation.One of the primary considerations when thinking of debt consolidation is to have a lower monthly payment through lower interest rate. Your student loan consolidation rate will vary from that of other students. This is because consolidation interest rates are fixed that is equal to the weighted average of the interest on your existing loan rounded up to the nearest eighth of one percent. The consolidation rate is fixed for the duration of the loan and capped at 8.25%. There are various repayment options when you consolidate your federal student loans and you should pick the one that is most convenient for you.Consolidation is a great tool to help students deal with their various student loans, but only when it is used properly. One of the most important factors to consider when consolidating your debts is the timing of it. Do not be tempted by low consolidation interest rate and consolidate your debts right away. Remember, once you’ve consolidated, you lose all grace period or the time you have to start paying your debts. If you consolidate too early, and you haven’t found a source of income yet, you have to start paying your consolidated debts when the due date arrives.Once you’ve decided to consolidate your debts into one, you can apply for a consolidation loan to a lender company of your choice. You’ll fill up an application with your information and your lender, after processing your application will start loan retrieval process. The consolidation company will contact your lenders to know the exact amount of your outstanding debt. The company will send payments to your lenders and your student loan will be marked as paid in full. You will then receive a monthly statement bill from your consolidation lender which you must pay regularly.