Summer is typically a time when many college students seek out financial aid and prepare to return to school or begin for the first time. With the rising cost of college tuition many individuals are turning to federal student loans in order to meet the costs that come with attending a college or university. While private student loans are available, many students have little or no credit history and often must use federal loans in order to supplement their scholarship or grant financial aid. Yet, after college many have trouble dealing with this debt and turn to a student debt consolidation loan in order to handle their student loans.
Federal consolidation loans for student loan debt are typically affordable when it comes to interest rates and there are a variety of payment assistance options available for anyone having trouble paying off their student loans. Options, like income-based repayment plans, forbearance programs, or federal loan consolidation plans are available to help students who have a large amount of debt and may not have the employment that affords them the ability to pay off this debt easily.
Student loan consolidations are an option in which a student can compile their student loan debt into one loan, which will make it easier to pay since there is only one monthly payment. Yet, students need to research their student loan situation before they choose a federal student loan consolidation plan. Types of student loans, like unsubsidized loans and subsidized loans, or federal loans and private loans, typically will not consolidate together under a federal student loan consolidation plan.
Also, there are financial advisers who say that anyone who only has a few sources of student loan debt may fare better if they pay those debts separately. Even with an affordable, low interest rate a student may end up paying more over the lifetime of their consolidation loan when time and interest are factored in.
Again, a federal student consolidation loan can help deal with student loan debt but each college student must analyze their situation and make sure that consolidating their federal debt will be in their best financial interest and the most cost-efficient way of handling their college debt. While there are various resources online that will help with federal student loan consolidations, it’s beneficial for a college graduate with federal debt to contact their lender to talk over options concerning the repayment of federal student loans.