Nearly 20 million Americans attend college each year.
- Of that 20 million, close to 12 million – or 60% – borrow annually to help cover costs.
- There are approximately 37 million student loan borrowers with outstanding student loans today.
Source: American Student Assistance
Student loans in America are huge burden that cling to a person right from the beginning of his college days. Therefore, it is important to start financial planning as soon as you graduate. One cannot discharge his/her student loan debt even after filing bankruptcy. The increasing cost of education is forcing us to avail private student loans along with Federal student loan options. Thus when we pass out as fresh graduate, heap of debt is piled upon our head. Student loan debt consolidation is one of the most traditional ways of debt relief solution. But you cannot consolidate your private student loans with Federal student loans to get the benefit of loan consolidation. You have to consolidate them separately.
Debt consolidation can chip away one’s monthly installment and lessen the hassle of handling multiple lenders. There are many programs that are engineered with intent to help a debtor get out of his student loan debt in an easier manner. But much depends on various factors like the type of student loan one availed, the burden of debt, the income flow and the willingness to maintain a financial discipline. If a debtor chalks out a repayment plan from the very time of his graduation, he could better manage to pay off his student loan after he gets employed. There are some debt consolidation firms where a person can enroll and get their assistance to pay off the loans.
It has to be remembered that unpaid student loan stays as a stain on a person’s credit report and adversely impacts his credit score. So, after stepping into professional field one can think about a debt consolidation company to pay off his creditors and close the chapter.
If you have multiple student loans, your consolidation company will negotiate your creditors on your behalf to reduce your debt amount. They may settle your debt by reducing the interest rate and by eliminating late fines. This way, you feel better in paying off your student loan debts.
Graphic via CollegeStats.org
The Tragedy of Student Loans”