Student Loan Debt Consolidation - How To Reduce The Burden Of Student Loan Debt
by: Brad Jacobsen
It’s
not enough as a student earning good grades,
graduating, and landing a job with a good salary.
What makes it more difficult is the rising costs of
education, in tuition fees, books and the cost of
living during the years being in school. There is no
question that the trends of college and university
prices have rose steadily over that last decade.
During the 2004-2005 academic year about $129
billion in financial aid was distributed to
undergraduate and graduate students. In addition,
these students borrowed almost $14 Billion dollars
from non-federal sources to help finance their
education according to the report Trends in Student
Aid (2005) from the College Board association. With
an adjustment to inflation the total financial aid
given to undergraduate and graduate students has
increased by almost 100% from 1994 to 2005.
Why have students been borrowing much more
today?
There has been a widening gap between the cost of university and
college tuition and aid in the form of grants causing students to
borrow more. Many students look at taking students loans as a good
investment because it allows them to complete their education with
better odds of a getting a better job and life. Because Students are
borrowing more and often taking out multiple student loans today,
however, it could lead to financial burdens. This would delay things
like buying a new home, car, getting married, and raising a family.
How can student loan consolidation help?
Also known as a federal consolidation loan, repays some or all of
the outstanding eligible federal student loans and replaces the
multiple payments that are made with one single payment. The payment
terms can even be extended to make the payments more affordable. The
interest rates are fixed rate for the entire term and is calculated
as the weighted average interest rates of your consolidated loans
rounded up to 1/8% not exceeding 8.25%.
Which student loans can be consolidated?
1. Federal and Federal Direct Stafford (subsidized and unsubsidized)
2. Federal and Federal Direct PLUS SLS (Supplementary Loans for
Students)
3. Federal Perkins
4. Federal Nursing Student Loans (NSL)
5. Federal Health Education Assistance Loan (HEAL)
6. Federal Health Professional Student Loans (HPSL)
7. Health Professions Student Loans (HPSL) Loans for Disadvantaged
Students (LDS)
8. Federal Insured Students Loans (FISL)
If a person has bad credit, can they still consolidate their student
loans?
Under the federal student loan consolidation program, no credit
checks are necessary, however, if any loans are in default, three
consecutive payments must be made prior to consolidating the loans.
What lenders consolidate student loans?
The Internet is an excellent resource to compare student loan
consolidation lenders rates and offers. It is just a matter to take
some time and compare different incentives between lenders.
Lenders may offer added incentives to consolidate student loans. For
example, depending on the balance of the current student loans, some
lenders may offer a credit or an interest rate reduction if payments
were made consecutively on time. Or, if a married couple has
individual student loans and want to combine and consolidate their
loans.
It should not be a strike against anyone requiring student loans to
get through university or college nor having a delayed hardship when
a person graduates and gets back into the work force.
