Student loan consolidation and settlement is one of the hottest topics in the financial markets today. The main reason for this is that the national student loan debt (just in the Unites States) is over $1 trillion.

What’s scarier is that the grand majority of the people who took out these loans didn’t get a job related to their original field of study. And if they did get a job, they aren’t making enough to pay their loans off.

And probably the scariest part of the loan epidemic is that it’s the only type of debt that cannot be “removed” through even bankruptcy.

Which brings us to the question, “What can you do with them?”

Well… it all depends on the type of loan that you took out. There are private loans and then there are federal loans.

Private student loans are loans that were taken out from a financial institution and are usually the toughest to settle, if possible at all. You would normally have to go through a different financial institution – like a bank or a credit union – to see if you can take out a new loan or line of credit with a lower interest rate and transfer the balance.

If possible, you should definitely consider using lines of credit versus actual loans into which to transfer the balance of your student loans. The main reason for this is that with loans you have to make payments the moment that the transfer is made. Whereas with lines of credit, you only make payments if you actually use the balance in the line of credit.

And the interest rates with lines of credit are typically lower than loans. In some cases, it might make sense for you to use a home equity line of credit. It is extremely rare for this option to be the ideal choice so make sure you’ve exhausted all other options before choosing this one as your last resort.

Federal student loans are a bit more black and white. Meaning that you don’t really have too many options to choose from when trying to consolidate federal loans.

In order to consolidate federal student loans, you would have to negotiate directly with the government. Luckily, the government recently announced a program where qualified candidates can consolidate their loans to lower interest rates and lower payments.

In some cases, you can even qualify for $0 per month payments.

This is all case by case and you would have to speak with a qualified attorney to see what type of program and payment plan you qualify for. And even though they are rare, you can find competent and capable law groups that can negotiate on your behalf and consolidate your federal student loans.