Here in June there are many men and women who are preparing for life after college as numerous graduations took place only weeks ago and have ushered countless students into the workforce or have many seeking an employment opportunity during times where joblessness still remains quite high and the number of private-sector jobs that were added according to recent reports was deemed to be lackluster. Despite the fact that there were employment opportunities added in May, it was far lower than what was hoped, and this is something that students have had to face over the past years as graduates who have student loan debt are finding that the job opportunities they need to repay these obligations simply may not be available.
However, some are turning to student loan consolidation options through federal consolidation plans or some have simply opted to get a private loan that will consolidate their debts, which may offer certain graduates more affordability, but factors like repayment assistance and forbearance options should not go unnoticed when consolidation is being considered. Students who turned to a consolidation loan as a way to group all of their student loan debt into one debt obligation have found that it can be more cost-efficient for their situation as the overall monthly payment may be lower and, in the case of federal loans and private consolidation options, there are some offers being made available for students to consolidate at a very low interest rate.
While students who may have only one or two loans, like a Stafford loan, for instance, are looking at an interest rate of around 6% or 7%, and consolidating in cases where only a few small debts are present could be a bad idea for certain graduates. Students must first look at their student loan situation to make sure that they will not have an easier time paying off a smaller principle amounts rather than one large consolidation principle before moving forward, but those who have decided that consolidation is right for them are often torn between whether they should opt for a private student loan consolidation plan or stick with the federal consolidation loan.
Many often choose a federal consolidation loan simply because there are repayment assistance plans like income-based repayment programs and opportunities for forbearance if unemployment is in place and the student simply cannot meet these debt obligations at the present time. Private student loans cannot be consolidated under a federal student loan consolidation plan, so in cases where both are present, it is an easier decision for students who want to consolidate their debts, but if a student considers consolidating with a federal lender, research must be done as to the interest rates that will be available, repayment options for students who may face financial distress, any penalties or fees that may be incurred if students do find that meeting the minimum payment on their private student loan consolidation plan is not an option.
There are banks trying to advertise more attractive student loans and student loan consolidation opportunities, but like rewards for paying on time, erasing certain parts of a student’s debt if they are financially responsible, and again, many banks are offering low interest rates that can be competitive with federal student loan consolidation rates, but during times where students are graduating into a job market that may not have the opportunities they need, various options must be explored within these student loan consolidation plans as to what help is available if a student hits a speed bump in their financial life.