Young adults today are living through one of the worst recessions the United States has ever seen, making it hard to support themselves because they’re so few jobs paying inexperienced workers a good wage. The only choice they have is to pursue a higher education in hopes of getting a job that pays half-way decent, but that’s becoming more and more difficult. The average tuition for a good college has been rising steadily with no end in site, leaving college grads saddled with expensive student loans debts that will take them years to pay off.
Student loan debt in America is growing at a rate of $2,853.88 per second, with the average college graduate now leaving school with an average of $27,000 in debts that they have to repay. Not only that, but with a economy that’s still in recovery mode, finding a good job after college is getting harder as well. But it doesn’t have to be like that. There’s plenty of strategies recent grads can take advantage of to lower the amount of student loan debt they have to pay back, one such strategy being debt consolidation.
What student loan consolidation allows you to do is combine all your outstanding debts into one, low monthly bill. This means your credit card, mortgage, car and school loans can all be one low bill, saving you the trouble of keeping up with so many different payments. The first step in student loan consolidation is to determine what type of loans you have because federal student loans are way easier to consolidate than loans from private lenders, especially if said loans were secured from multiple lenders.
Private lenders often don’t like to allow their customers to consolidate their loans because they will lose money, and we all know how banks feel about that. Even if they allow you to consolidate your loans, they could still pull some tricks on you that will have you paying more money instead of less. One such trickery is when banks allows you to consolidate your student loan debt, lowering your monthly payments, while still keeping the interest rate the same. So while you’ll be paying less money, ultimately you’ll end up paying more money over the life of the newly consolidated loan.
The interest rate the banks offer is also entirely dependent on your credit score, so it’s wise to try and clean it up before starting the consolidation process. You can further help lower the interest rate on your loan by deducting your monthly bill directly from your checking account, which could lower it by as much as 0.25% to 0.5%. Another way you can lower your student loan debt is by loan forgiveness. Student loan forgiveness is when the federal government cancels half or all of your student loan debt, under very special circumstances.
You might qualify for student loan forgiveness if you either do volunteer work. join any branch of the armed services, become a teacher, or practice medicine in poor neighborhoods. So if you feel burdened by student loan debt, don’t fret, because there are plenty of ways you can lower your bill and be debt free faster.