It is not uncommon for students in the United States to end up with several loans by the time they graduate from college. Accumulating such a large amount of debt often creates a financial burden for new graduates before they even get a chance to enter into the workforce. Consolidating school loans simplifies loan repayments by combining several monthly payment obligations into one. This procedure helps to lower student loan payments each month and/or extends the life of the loan.
Too often, students begin college without thinking about having to pay back student loans. Unfortunately, within six months following graduation, a borrower’s first loan payment is ordinarily due and reality takes effect. In previous years (and in a better economy) making payments for student loans shortly after college graduation wasn’t quite as difficult. However, modern day graduates are competing with other job seekers to find work in a nation with a significantly high unemployment rate. The combination of not enough jobs; expensive loan obligations and outrageous interest rates has literally put recent graduates into a very bleak situation.
A recently proposed bill in Congress would help with student loan payments by allowing current borrowers to refinance at a lower interest rate. If this bill is passed, students could refinance and consolidate student loan debt, which would provide student loan debt relief by reducing a borrower’s monthly financial responsibility.
Most types of federal school loans qualify for consolidation, including:
- Direct Subsidized & Unsubsidized Loans
- Subsidized & Unsubsidized Stafford Loans
- Direct PLUS Loans
- Federal Perkins Loans
- Health Education Assistance Loans
- Federal Nursing Loans
Right now, school loan interest rates are low and you may be able to choose from fixed or variable rates. Therefore, it is good time to begin school loan consolidation.