As our economy struggles to improve and questionable numbers continue to arise in the job market, there are some students who are either currently looking for work, graduates who may be entering into the job market and seeking employment opportunities, or there may be some men and women who have graduated college and may be in a situation where they are underemployed, meaning they are making far less than average college graduates in their particular field. It’s because of these unstable and at times unprofitable career opportunities that many graduates have begun to consider using options like consolidating their student loans or attempting to qualify for income-based relief options through repayment programs that may be specifically available to certain graduates.
For students who have been dealing with college loans, it’s understood that federal loans have traditionally offered the best repayment options in terms of consolidation loan rates, which come with a low fixed interest rate in many cases, and there are also plans like income-based repayment options that could help students find debt relief options to be more affordable for their current financial predicament. Students need to understand that sometimes consolidating or entering into an income-based repayment plan could be more costly overlong run due to the fact that it will require students to pay their debt over a longer period of time and when interest is factored and this could be more expensive.
Students who may have private loans they are dealing with do also usually have consolidation options, but again overall costs and potential variable interest rates could be a problem for these particular individuals as well. Also, depending on a graduate’s lender, there may be forgiveness options available if a student makes timely payments on their debt, but as to what options are open to help students when affordability is an issue may come down to what particular lender a student has used and what plans they may have in place.
Yet, recent graduates often have time to consider these options and potentially find a more beneficial and lucrative employment opportunity as grace periods that are usually given to graduates can allow for time to plan what debt repayment method will be best for a particular college loan situation. It’s during this time that many financial aid counselors want students to look at what their student loan situation is, calculate the costs that will arise if they pay off their debts separately, how much a consolidation loan may cost, and what overall costs may come if they use an income-based repayment plan which will lower their monthly payment on their loan.
While it will depend on a student’s situation and ultimately come down to a personal choice as to how they handle their debt, graduates do need to be aware of these options that may offer more affordability, even if they are not necessarily optimal in some cases, due to the fact that students who are unable to pay their college loans after graduation may find themselves in a situation where missed payments or even delinquency will do damage to their credit score and this could make getting lines of credit to pay for a car or mortgage more expensive in the future and, obviously, this could cause more financial stress down the road.