Consolidating college student loans

In part, that's because a law enacted last year eliminated the decades-old "single-holder" rule.

That rule required borrowers who had all their federal student loans with one lender and wanted to consolidate to use that lender. Smaller lenders are eager to lure student loans from the major players, Walker says.

But that lower monthly payment amount comes with a price.

By increasing your loan repayment period, you’ll have more payments to make and pay more interest.

If the new rate is higher, they'll consolidate your loans before July 1; if the rate falls, they'll wait until after July 1. The standard repayment for a federal Stafford loan is 10 years.

By consolidating, you can extend the term to up to 30 years, thereby reducing your monthly payments.

A Direct Consolidation Loan has a fixed interest rate.