Student loan is considered a big issue that many Americans are burdened today. Currently, student debt totals around $902 billion to $1 trillion with $864 billion in federal student loans and $150 billion in private student loans. We are looking at around 25% of borrowers owing around $28,000 and 10% owing a little over $54,000.
Students who borrow this kind of money don’t even realize how big their loans have become until a meeting with your college financial aid counselor. Handling these student loans can be overwhelming, especially to someone looking forward to graduation, only to realize that their hard earned cash can be slashed out by the amount of debt one would have to pay.
While student loans are hard to understand, you’d be surprised of how easy it is to make them more manageable. This can be achieved through federal loan consolidation. To help you understand this easily, I shall discuss this more closely.
First, make sure that all of your loans to be consolidated are federal loans. Private student loans are not really loaned by federal government so these loans cannot be subject of federal loan consolidation. Such loans must be in grace, repayment or deferment status. Should your loan be in default, you would have to make arrangements with your lenders before you consolidate your loans. The total balance of all your federal loans should amount to a minimum of $7,500.
In order to get your interest rate for your federal consolidated loan, you must first combine your student loans to one loan and compute for the weighted average of the rate of interests, round the number up to the nearest 8th of a percent, with a maximum rate of interest of 8.25%. If your monthly loan payments are linked to your checking account this gives you an extra .25% interest rate deduction on your loan. Should you have variable interest rate loans, you can request to have a fixed rate of interest.
The good thing of having loan consolidation it costs nothing to have them consolidated and there are no pre-payment penalties. By having your federal loans consolidated you may even avail of deferment benefits, and various repayment options. Best of all, when you are finished consolidating your loans, you will then owe the U.S. Department of Education only one monthly payment with you can use to manage and record to take not of the current standing of your student loan balance.
Although you must also take not that while consolidation makes it easier for you to handle your loans, it does have its downside. For instance, it may be inviting to accept the loan offer of extending your loan payment by up to 30 years to make it easier on the wallet but that could mean adding additional money for the payment of interest as well.
Though monthly payments can be made more manageable, you must always look into difference that consolidated and unconsolidated loans could have in terms of monthly payments. This way, you will be able to choose which option will be more burdensome to your pockets.
August 23, 2014
University education is very costly and every year, that cost is increasing even more rapidly than inflation. In school year 2013-2014, the College Board posted that the cost of undergraduate tuition and fees at private institutions was pegged at $30,094. Public colleges and universities charged state residents roughly $8,893 while out-of-state students had to pay an average of $22,203.
August 23, 2014
Due to the cost of higher education in the US it’s no wonder why a lot of people turn to student loans for help. While this debt may be helpful for them to finish college, sometimes it is the same burden that leads the students drop out.Josh Brooks, for instance, was a student studying at Valencia College in Orlando, Florida in 2006.
August 23, 2014
Loan consolidation is rapidly becoming a top choice for university graduates who are looking for more affordable ways to repay their student loan. With overwhelming amount of student loan, students and graduates are scouring for much needed help. Student loan relief companies, such as Debt.org, offer these debtors some help.
August 23, 2014
When you think about it, you get to enjoy more of your hard earned cash if you choose to settle your student loan debt through refinancing. It is a sure fire way to lessen your monthly debts, but only a handful of financial institutions offer this kind of service.
