Federal student loans are very common among college students as the costs of attending a university are becoming more expensive and making it necessary for students to borrow money to supplement scholarships and grants when it comes to paying for college. However, after graduation many with student loan debt are looking for an easy and affordable way to repay their college loans and it’s at this point many turn to low interest student loan consolidation.
A consolidation loan for student debt can be beneficial, especially when it comes to federal student loan debt, as most federal interest rates are set and do not vary depending on someone’s credit score. Also, many student loan consolidations that are from federal student loans go through the Department of Education’s Direct Loans program, which not only helps students consolidate their student loans, but also offers a variety of other repayment options.
However, it might not be in the student’s best interest to consolidate their student loan debt. Someone who might have various student loans and a large amount of debt might benefit from pooling all of these debts into one place, but a student loan consolidation plan can cost more over the long run when interest becomes a factor.
There are some types of student loans that will not consolidate, so this needs to be considered when a student or graduate is looking into consolidating their student debt. Yet, if a student only has a few sources of debt then they may benefit from paying their loans separately rather than consolidating.
This will vary from person to person as no one’s student loan situation will be exactly the same as someone else’s. So, in order to figure out what the best route to take will be, one simply needs to sit down and factor in the total cost of repaying student loans separately, taking into account time and interest, versus how much it will cost if one were to consolidate. This should show anyone with student loan debt the best option, but it will then be a personal decision as to which route is taken.