Many people consider an education to be the vehicle to the future – a way to fulfill their professional and personal dreams. Travel, family, owning property, wealth, opportunity and happiness seem more attainable with an education.
And yet, many students finish their education feeling cheated. They are left with a piece of paper, a massive job hunt and often more than $20,000 in debt. This can be discouraging. What many students don’t realize, however, is that they don’t have to be controlled by their student debt. In fact, they can control the purse strings.
Consolidating student loan debt is one way that many young people are using to take control of their financial future. They already have the education and now they need to move forward in a positive way.
Normally, with debt consolidation people are able to combine all of their debt, including credit cards, lines of credit and loans, into one big loan. This can result in lower interest rates and savings, as well as less stress and hassle.
With student loan debt consolidation, there are some added benefits:
1. While with most debt consolidation programs, a person is required to qualify based upon their credit rating, student debt consolidation programs don’t. So, even if you have a poor credit score, you are able to access the benefits of debt consolidation.
2. While some people may be restricted in terms of the amount they can receive in one loan to consolidate their debt, student loan debt consolidation typically has no maximum amount.
3. If money is ever tight, with student loan debt consolidation, people can postpone repayment until graduation or until they get a job.
4. With student loan debt consolidation, the debt is usually discharged at the death of all borrowers. So, you won’t be leaving an unnecessary burden behind on your co-signers or family members.
5. Everyone loves to save money on taxes and with student loan debt consolidation the interest you pay may be tax deductible.
So, if the amount you owe the bank for your education is getting out of hand or you’ve just graduated and you want to make repayment easier, a good student loan debt consolidation plan could be right for you. Check into local financial institutions and consider seeing a credit counselor to help you.
By: Kathy Burns-Millyard
Posts Tagged ‘Financial Future’
Student Loan Consolidation – Don’t Procrastinate
January 18th, 2010
Perhaps you were the student who waited until the last minute to cram for finals or routinely rolled out of bed five minutes before morning classes began. Procrastination is a common part of many students’ college experience. However, putting off consolidating your student loans and locking in the current interest rate won’t harm your grade point average, but it will affect your financial future. If you are thinking about student loan consolidation, you have until the deadline of June 30, to take advantage of the current low interest rates.
With interest rates expected to increase from 4.7% to 6.8% on July 1st, not consolidating your student loans could be a big mistake that will cost you thousands of dollars. For example, if you currently owe $30,000 in Federal Stafford Loans, monthly payments are $314. This amount can drop to $217 if you do a loan consolidation with the current interest rate. If you don’t meet the deadline, you will soon be paying $345 a month. Wouldn’t you prefer to be doing something else with $128 every month? As well, parents who are currently paying on PLUS loans should expect a hefty increase to what they are paying in interest if they don’t lock in the current rate before the deadline.
Besides the annual adjustment to the student loan interest rates, sweeping changes to the terms of financial aid are due to take affect on July 1st as part of the U.S. Congress’ Budget Reconciliation Act, and most of these changes will not benefit borrowers. Among the changes, students in school will not be able to consolidate their loans. As well, loan origination fees for students will be doubling, and the “in school” interest rate that currently gives students attending classes or in their grace period a discount of .6% will be discontinued.
Another reason not to delay in consolidating student loans is that there may not be an amnesty period for borrowers who fill out applications that aren’t processed by the deadline. Last year, a flood of applications were received the day before the rate hike went into affect, and the U.S. Department of Education generously offered amnesty for those who had submitted completed applications prior to the deadline. This year the Department of Education might not be so kind, and applicants who haven’t completed their consolidations before July 1st could be faced with having to pay the higher interest rate. Because student loan applications can take anywhere from one to 4 months to be processed, the time to submit an application is now.
The good news is that if you are considering a student loan debt consolidation, you still have enough time to complete the process and take advantage of the current interest rates and terms. It only takes a matter of minutes to fill out an application, and there is lots of help available. So, go ahead and get started, and pat yourself on the back for taking charge of your financial future.
By: Mike O'Brien
How to Find a Student Loan Consolidation Program
December 28th, 2009
Student loans catch up with you fast. You work hard through four or more years to get the education you need for the career you’ve always dreamed and though graduation day is anticipated, it’s also dreaded. Graduation from college is bittersweet. You enter your new life and start your independent voyage into the life you’ve dreamed of during your time in school, only to be immediately hit with the crushing level of student loan debt you’ve acquiring while pursuing your education. You aren’t alone. Millions of students around the world are facing this same moment as they graduate as well and during a tough job market, the pressure is even more intense to find a way to pay the bills and the debt. There is help in the form of a student loan consolidation program.
Debt and loan consolidation programs are designed to offer you relief from multiple loans by consolidating them all into one loan which carries only one monthly payment and one interest rate. You will, essentially, pay off the multiple loans you currently have and leave you with a solid credit standing and the opportunity to build good credit with the new loan. When you take the time to check into the student loan debt programs available you are taking control of your financial life and putting in the effort toward a healthier you and more stable future. You can show initiative when you work with the credit counselor and learn how to negotiate with creditors and loan officials, which is invaluable information for your future. Work with an experienced credit counselor and you will end up with the right loan for you and a plan of action coming out of the consolidation process.
Student loan consolidation programs are out there and you should consider using one of them to find relief from your student loan debt and plan for a secure and successful financial future from the first day you leave campus. Only then will you truly be able to follow the dreams you’ve been planning for years and should responsibility in handling your own finances.
By: Becki Andrus