Students who have outstanding college loan debt obligations from multiple sources have found that consolidating these loans can provide more affordability in terms of the costs associated with monthly mortgage payments. These repayment assistance options through consolidation plans are available, typically, through either a private student loan consolidation plan or a federal consolidation loan, both of which may offer the lower costs a student needs to avoid missing payments or defaulting on their debt.
Private student loans are unable to be consolidated with federal student loans under a federal student loan consolidation plan, but students who may have a mixture of these debts may also have options through a private student debt consolidation loan. Many graduates look to federal student loan consolidation options because they can offer lower interest rates, but if a student is in a position where they are simply unable to meet multiple student loan debt repayments, these consolidation plans have allowed for students to erase these multiple obligations and simply group all of their student loan debt within one personal loan commitment.
Obviously, students who only have to meet one payment on their student loan debts may find this opportunity is more affordable, but even students who have consolidated their loans have been able to participate in a program that allows for even lower costs to be met on their repayment obligation. As an example, students who consolidate their loans under a federal student loan consolidation plan may also qualify for programs that will require them to only pay a small percentage of their monthly income towards repaying the debt.
There have been many concerns over the past months as rates of default on student loans are reportedly rising due to the fact that some students are either unable to repay their student loan debts due to factors like unemployment or underemployment, or some may simply be unwilling to honor this debt because of the high costs may be associated with their personal student loan debt situation. Yet, private student loan consolidation plans or consolidation loans from Direct Loans, the federal student loan servicer, have been able to make the burden of repaying these college loans less severe so that students will not do damage to their credit score by missing payments or simply giving up on repaying these loans.
While student loan consolidation plans have helped some, financial advisers counsel students to weigh all of their options and be sure that a repayment plan cannot be formulated to help them erase their debts separately, as consolidation loans have usually been associated with higher overall costs. While some of these consolidation plans may offer a low-interest rate, it could take longer to repay a debt consolidation loan and, as a result, students may meet higher costs if only minimum monthly payments are made. This has been of little concern to some, as simply avoiding missed payments is their main goal, but for students who may be in a decent financial position, weighing all of one’s student loan debt repayment options will be necessary to find the most affordable and cost efficient repayment option.