Information here in September has shown that student loan debt is not only remaining problem in the lives of many graduates but it has led to young men and women defaulting on these financial obligations or even turning to bankruptcy years after graduation, simply because student loan debt can be an added hindrance in the financial lives of graduates four years down the road, and in some instances may be substantial enough to where a consumer cannot meet certain basic cost related to paying down their debt.
Yet, as some have questioned whether students are taking advantage of opportunities like debt consolidation loans after graduation, as there are some instances where these loans can come at a lower interest rate in a position where a high amount of college loans must be repaid. This is not to say that every student will benefit from a debt consolidation loan, but some financial aid counselors hope that students will at least consider this repayment route when they are having trouble meeting certain costs, like the total minimum monthly payment on multiple loans. Students who consolidate their debt have seen lower monthly payments as a result of a lower interest rate in some cases, but looking into these costs is something that will be necessary before a student makes any decision as even consolidation loan options may vary.
Obviously, the types of debt that a student has, be it a private or federal loan, or even certain types of federal loans, may alter what consolidation opportunities a graduate has, but there is also the problem that some officials feel graduates overlook when consolidating their loan. Many advisers often counsel graduates who are facing financial hardships to contact their lender directly as there may be a wide range of programs in place to help with specific issues, like if a borrower’s health deteriorates to the point where they’re having trouble meeting their repayments or if unemployment is a factor.
However, when consolidation loans are used as a way for students to find more affordability, the overall costs that they meet could potentially be higher than had they focused on paying debts separately. There are countless resources and financial advisers that often point out students who can address a student loan debts separately, by focusing as much money as they can on paying off either high interest debt quickly or low principal amounts so that they can use the saved money to pay off other debts, have found that some students can get out of debt faster and at a lower overall cost in certain cases.
This again is not going to be right for every student nor will it help every graduates student loan debt situation, but if monthly payments are the problem, some students have sacrificed lower overall payments in exchange for more affordable monthly payments at the present time, as there are graduates who have made the personal decision to simply meet a minimum monthly payment which is more affordable on a consolidation loan at the currently so that they will not default or face financial stress related to a high monthly payment on their student loan debts.