Student Loan Consolidation Plans For College Debt–Are Student Loan Consolidation Plans Helping Graduates Repay Debt?

Student loan consolidation plans have been used by many students over the past months as a way to gain a better hold over their student debt situation. Difficult financial times have been faced by many over the past year or so and, for college graduates, repaying student loans debt has been particularly burdensome since the cost of attending a college or university has been on the rise and required the use of more college loan funding for some.

Yet, student loan consolidations have helped students who have a high amount of college loan debt from various student loan sources to organize their student debt into one loan, with one monthly payment, attached to a single interest rate. This can be beneficial in that students run a smaller likelihood of missing a payment when various debts are involved, but there are some financial advisers who do not believe the student loan consolidation plans are always in a graduate’s best interest.

While student loans from federal sources and private sources are often unable to be consolidated under one student loan consolidation plan, college graduates who have one form of debt or the other may be able to use a consolidation loan to their benefit but it may be more costly in some cases. While the idea of a single monthly payment on student loan debt draws many to consolidation plans, a large principal amount attached to even a small interest rate can take a longer period of time to repay and can eventually end up costing a college graduate more money once the entirety of their student debt is repaid.

Students who may have differing types of student loans that cannot be consolidated will obviously not benefit from consolidating since only a few loans may be grouped together. Yet, if students who have loans that can be consolidated under one student loan debt consolidation plan decide that consolidation is the right path for them, many advisers often counsel students to pay more than the minimum monthly requirement on these consolidation loans so that they can get out of debt faster and incur less cost overall.

Typically, college graduates who have student loan debt have the best chance of figuring out the optimal repayment plan for their situation by simply sitting down and figuring out the total cost of repayment if they were to keep their loans separate versus consolidating. However, some college students who have hit difficult financial times or are unemployed may have turned to forbearance options on their student loan debt or have simply consolidated their student loans and used an income-based repayment plan so that they can afford their repayment requirements on their debt.

Individuals with student loan debt can talk over various options with their lender if they are having trouble repaying their debt as there are assistance plans available to help graduates with college loan debt avoid defaulting and doing damage to their credit score. While student loans are sometimes necessary, debt does not have to be a financial burden for years after a borrower graduates.