It’s common that students exit college with multiple student loan debts, which can be problematic for some when it comes to repaying these college loans, however, there are those who turn to student loan consolidation plans as a way to better manage debt after college graduation. Consolidating student loan debt can be an option for many graduates through either a private or federal consolidation plan after they graduate, but depending upon one’s situation, many counselors often advise students to research consolidation or be careful how they go about consolidating their student loan debt, as some options are simply going to be better than others.
As an example, students who may have various federal student loan debts could qualify for a student loan consolidation plan within a federal loan program, which may bring about a lower interest rate and more repayment options than some private consolidation loans. Federal student loan consolidation plans have fixed interest rates and often come with numerous repayment plans which can be beneficial to students who either want to erase their debt quickly or who may have trouble repaying their student loan debt and need some form of assistance.
Yet, when a student has a mixture of private student loans and federal loans, private loans cannot be consolidated under a federal consolidation plan, which could mean that consolidation of any sort is not beneficial. In these cases, or in any case where a graduate feels consolidation is their best option, counselors often suggest that graduates simply look at the costs of repaying their debts separately versus the overall cost of a student loan consolidation plan to see which route may be more cost-efficient.
Understandably, some students may be unable to meet minimum requirements on multiple student loans, and as a result turned to student loan debt consolidation, but this is not always the case for every graduate and it could benefit a college student to weigh their options when it comes to erasing their student loan debt. While some students have used a consolidation loan and have simply made more than the minimum monthly payment, thus erasing the debt faster, there are, again, financial constraints which many may face that prevents them from repaying their debt sources one loan at a time.
Obviously, graduates want to avoid missing payments on student loan obligations, as this could hurt their credit score, but avoiding higher repayment costs through consolidation is also beneficial and require proper research on the part of a graduate because the student loan debt situation from one student to another will differ and, obviously, offer various repayment options that may be in their best interest.