If you are a 4th year med student or resident, you have an opportunity to consolidate your loans. Only the fed loans can be consolidated. The private loans cannot be consolidated. The reason that it is a very good time to consolidate now is because the interest rate on you fed loans are variable, and now they are at an all-time low of 2.77% (if you are a resident in deferment they interest rate is higher and for the loans that you got in '98 are at a little higher interest rate). If you will consolidate before exactly July 1st of this year you can lock in your interest rate at 2.77% (actually its 2.85% b/c they round it upto nearest 1/8th). Also don't forget that if you have loans on or before '98 they will be added with a weighted-average making your overall interest rate slightly higher. Again, you will be able to lock this low rate for 30 years. If you wait until after July 1st the interest rates will (99.99999%) go up. Plus the gov is planing to reform the way fed loan system and so future med student graduates unfortunately will not be able to fix their interest rate. I have not done my research on the companies that provide these consolidation loans, but I can tell you that fed loans have strict regulations and that all banks participating in this program ARE REQUIRED to provide the same interest rate, no origination fees, no prepayment penelties.... So basically the difference between different banks that you should be looking for are essentially how reputable they are, how good their customer service is, are they going to be around in 30 years, track record, also very improtantly the incentives they offer. Some consolidation programs will offer further 0.25% interest rate reduction on the 2.85% if you pay through on-line payments. Also I have seen 1% interest rate reductions with 48 consecutive payments, and overall 1% principle reduction. You have to do the calculation on these if they give you the option. Your interest rate can be as loww as like 1.6% in 4 years or so. These are essentially minor differences b/c almost all companies offer the same options. I am going with sallie mae b/c they have been the servicer for all of my loans, are reputable and are user friendly. THe key now is that if you are a 4th year/resident is to consolidate these loans as soon as you separate from medical school, usually on JUne1 and definately as soon as possible before July 1st.
In fact, if you have the opportunity to consolidate and fix a 2.77% interest rate and you don't, you have just screwed up very big. If you lock in the higher interest rate after July 1st, over 30 years you will pay off A LOT MORE MONEY in interest.
BTW, from all of the people I talked to, and reading on the internet the interest rates will 99.999999% not go down. This is the lowest rate ever. You should talk to your financial aid officer at your med school to discuss you personal situation, of course, but one fact remains that you will probably never get to fix rates so low again. (sorry to sound like one of those marketers, but it is true)