Student loan debt is increasing every year with the increase in the college tuition fee and related college expenditure.
A study conducted by the National Center for Education Statistics indicate that as many as 50% of graduates have taken worth as much as an average of US $10,000.
In the recent years, the interest rates have been fluctuating between 2% to 4%. The loans are taken not only by student fresh out of college, but also by those who are over 20 years or as much as 40 years.
If the repayment history is good, the consolidation interest rates can be as low as 2%. Statistics indicate those who have debt of more than 8% of their income usually and face problems to generate future loans.
There are various ways to reduce debts:
Reduction of principal balance
reducing monthly installments help in getting better credit evaluation.
there are other options available for different types of financial assistance like grants, scholarships, federal and private loans
Government of United States of American is offering various opportunities to decide on the best financial assistance like Student Aid Wizard from the US Federal Government Department of Education.
after graduation, they need to start paying their debt.
Choosing the right kind of student loan
Reasons to consolidate debt are:
More the reduction in interest rates, less the monthly installments as well as overall debt
As interest rates is the lowest as compared to recent years, getting better rates than during the start
Reduction in the number of creditors to ensure better handling.
Student loans financed by federal government have much lesser interest rates as compared to private. But consolidation of federal as well as private may lead to higher interest rates, therefore it is advisable to keep the both separate. It is also advisable for students to clear their loans regularly rather than having defaulted, affecting the credit in future.
Consolidation of Student Loan Debt
With the increase in education costs students are getting over-involved by student loan debts as higher education costs are ever increasing as well as students going out of station to pursue higher education needs to spend substantial amount of money in other amenities. This affects their education. Consolidation can help clear debts and revive financial status.
Students are able to regularize their other debts such as accommodation rentals, food, credit card debts and education debts together into a singular consolidate debt.