Right now, the sub-prime mortgage crisis is causing a lot of problems for a lot of people. Rising interest rates mean the mortgage payments are rising, and many people are no longer able to meet the minimum required payments, so financial institutions are foreclosing, evicting people, and selling the homes for whatever they can.

Tempers are getting so bad, that evicted owners are starting to vandalize their own homes - ripping out toilets, destroying electrical panels, and defacing walls and fixtures that can't be taken. It has gotten so bad, that companies like Prudential are now offering incentives to evicted homeowners to leave the home in selling condition.

So, what does this mean for you and your student loans? Well, the financial institutions make their money on an interest-rate spread - the difference betweeen what they pay to to Federal Reserve, and the amount you pay to them. So as long as the spread is positive, they are making money, and everyone is happy.

This means that a new consolidation loan would be taken out at a new, higher interest rate (since rates are going up), and the only way you could pay a lower net amount is to change the terms. You will be able to reduce the amount you pay by extending the time you take to pay the loan off.

Note: student loan consolidations can renew your deferment choices if you have already exhausted the deferment options on your existing federal student loans. A student loan consolidation can significantly reduce your monthly payment burden. Consolidation allows you to stretch your repayment period from the standard 10 years to up to 30 years, depending on the total education debt. Student loan consolidation programs allow for a borrower's loans to be paid off and a new consolidated loan created. These programs simply loan repayment by combining several types of Federal education loans into one new loan.

Interest rates for variable student loans are reset on July 1. In the past two years, rates have risen from historic lows, but this year the rates will remain the same. Rates will rise from 3.37 percent to 5.26 percent for student borrowers already making payments.

If you are thinking of defaulting on your student loan, be very careful, because there are big penalties for non-payment on a student loan, especially a federally guaranteed one.

If you wish to pay down your loan quicker, there are ways to avoid pre-payment penalties. If you are getting a first time educational loan, there are places that can help improve your odds of getting accepted.

A consolidation loan is not the best option for everybody, but in many cases, it can help lower your overall expenses, and give you a bit extra money each month, to help with the things that are important to you now.