Student loans are one of the more common methods that many individuals use as a way to supplement any financial assistance they may receive when pursuing a college degree, but many are finding that the costs of college have become so expensive that a higher amount of college loans may be necessary in certain instances, which obviously has left some graduates facing a great deal of debt. However, when it comes to methods students are using to manage their debt after college, consolidation loans are one of the more popular ways that these men and women are finding more affordability in their monthly payment obligation.
Yet, there are some advisors who feel that consolidating may not always be in a student’s best interest and, as a result, graduates need to look at the costs of consolidating their student loans, whether they can afford to do so, and perhaps explore alternatives to student loan consolidation, like federal repayment plans that could lower an individual’s monthly payment amount or offer forgiveness.
There are also some federal employment opportunities that will repay a college graduate’s student loans up to a certain amount for each year that they are employed. Obviously, this can be helpful for students who may have a manageable amount of debt, but are simply in a position where it could take a few years to erase the total amount they owe, but with these employment positions for federal repayment options, students may not only have a stable employment opportunity but one that will help them erase their debts over time. However, this is not to be confused with a student loan forgiveness option, as these employment repayment options simply repay a debt rather than forgive a specific amount.
Public service workers who qualify for federal student loan forgiveness may find that after a set period of time in repayment, they are able to have the remainder of their debt forgiven if they qualify for this particular option. Usually, individuals in the public service area of employment will have to meet payments on their student loans for 10 years, and some non-public service workers may have their debts forgiven after 25 years of repayment, but there are also some plans that may be helpful in reducing the monthly payment in these cases, like income-based repayment programs.
When it comes to consolidating, some of these options that students may have for federal loan repayment, as an example, will require that a student be in one type of a federal repayment program, and consolidation programs are one aspect of these repayment opportunities. Students who may have an excessive amount of student loan debt but may qualify for student loan forgiveness might want to use a student loan consolidation plan if it will give them an affordable monthly payment and, again, allow them to have their debts forgiven after 10 years.
However, students must look at their particular situation to make sure they will benefit from consolidating as any type of debt consolidation will, in most cases, cause the overall costs an individual must meet to increase if they only make minimum monthly payments. Advisors want students to explore this aspect of student loan consolidation to make sure that they are using a consolidation program in a way that will most likely benefit their financial situation, as paying more money overall thanks to interest could be problematic for some graduates.
Yet, students who may be in a difficult financial position after graduation and fear they simply cannot meet the totality of their student loan repayment obligations when loans are not consolidated have usually benefited from student loan consolidation since, in many cases, it can lead to lower monthly payments. While consolidation may be helpful for some, students must, once again, review options available when it comes to erasing their debt to make sure that if they do consolidate they will be able to pay off their debts in a timely manner or, in certain cases, they are in a situation where simply meeting debt repayment on their student loans is unaffordable and consolidating their debts is the best choice for their particular situation.