Student loan consolidation plans may be helpful for some graduates who have multiple college loans and have exited college with a sizable amount of debt. Student loans have become quite common among many students who are attending a college or university, as the costs of college have not only risen but some scholarships or grants may not meet the entirety of one’s financial needs when pursuing an education.
However, consolidation plans which may be used for most college loans are not always in a graduate’s best interests, and for this reason many financial aid counselors often suggest that students take a close look at their financial situation and their student loan debt to make sure they are in a position to benefit from a consolidation plan. Obviously, consolidations may be available on both federal and private loans, but these types of loans may not be mixed in some cases, meaning private student loans are typically not able to be consolidated with federal loans.
Also, there are concerns by some advisers who feel that consolidating multiple college loans could be more costly to students overall, which is something which may be avoided if alternative repayment options are explored. Understandably, some students cannot afford to meet multiple college loan debts due to financial troubles in their personal life, but they may be able to afford the payment which is required on a single student loan consolidation plan, as only one monthly payment and interest rate must be met by a graduate.
Yet, despite the fact that there are some student loans consolidation plans which offer low interest rates, students are still advised to explore repayment options which may be more beneficial. Again, if a student has a mixture of loans, like federal and private loans, consolidating may do little to help and could, again, cause an overall increase in the total amount one must repay.
On the other hand, there are students who have been able to use student loan consolidations as a way to group all of their debts into one loan, and simply meet more than the minimum monthly payment, which has allowed them to not only find the affordability they need in repaying their debt, but also lower overall costs that may be associated with a student loan consolidation plan.
For students who may be able to meet multiple debts separately, this could lower overall costs on student loans as smaller principle amounts may be easier to erase than one large consolidation sum. Yet, this option will obviously come down to a student’s personal financial situation as to whether meeting debts separately is affordable versus a need for a student loan consolidation to avoid missing payments on one’s student loan debts. Graduates can contact their student loan lender for alternative repayment assistance plans, like income-based repayment options available on federal student loan debt, if affordability is a problem, but again, graduates have still been urged to weigh all options when it comes to repaying their student loan debt to find the best and most affordable option for their personal situation.