Should I consolidate my Perkins loan with my other student loans?

Consolidating Perkins student loans

When opting for government student loan consolidation, you may want to consider leaving your Perkins loan out of the deal. The Federal Perkins Loan is a need-based student loan to assist American students in funding post-secondary education.

Perkins loans are for undergraduate and graduate students with "exceptional" financial need. The loan comes from the U.S. Department of Education, which means that your school contributes a share to this loan.

There are some loans, such as the Perkins loans, that you should consider keeping open when deciding on a federal student loan consolidation program. For one thing, the government will continue to pay all interest on Perkins loans while you are in school.

If you’ve consolidated that loan, the benefit is lost. The loan, which carries a fixed interest rate for the duration of the repayment term, is worth managing on its own. In addition, the Perkins Loan Program has a nine-month grace period.

There is even better news for educators. If you become a teacher in a designated low-income school, a percentage of the loan is cancelled for each year spent teaching full-time. That can add up to a very nice incentive. Be sure to do some research on this and other federal student loan consolidation options before making your final decision.