(MONEY Magazine) – If you're looking for a way to cut student-loan costs, and the buzz about loan consolidation has left you confused, that's understandable. Over the past nine months, the business of consolidating several student loans into one has changed more times than a recent grad's career plans.

To begin with, the Department of Education (DOE) temporarily stopped taking new consolidation applications last fall after a backlog of 84,000 built up. Then in November, Sallie Mae also said no to new petitions. To avert further backlogs, Congress let private lenders consolidate all government-backed loans, including direct loans, through next September and lowered the typical interest rate from about 9% to no more than 8.25%. The upshot is more convenience and lower payments now. "Consolidation is a better deal today than it was a year ago," says David Longanecker, the DOE's assistant secretary for post-secondary education.

Maybe so, but you should not let this hubbub obscure a drawback. When you consolidate student loans, you cut your payments by 10% to 40% because you stretch out your debt. However, extending your loan from the standard 10 years to as long as 30 years could more than double the total interest you'll pay for an education you've long forgotten.

So consider another way to relieve your student-loan burden. Most lenders--including Sallie Mae (800-524-9100)--offer repayment options aside from consolidation that lower your payments without substantially dragging out your loan. For example, you can opt for a "graduated repayment" schedule, under which you make low payments now and progressively higher payments over 10 years as your income presumably rises.

You can also try less formal methods. Some lenders will trim your rate by two percentage points once you make 48 consecutive timely payments and will shave another quarter-point if you make automatic electronic transfers from a bank account. If your lender doesn't offer any consolidation options, call the DOE (800-557-7392), the nonprofit lender Nellie Mae (800-634-9308) or a private lender who does, such as Citibank (800-934-1900) or PNC Bank (800-762-1001).

--Kelly Smith