Student loan repayment can be a troublesome burden forcollege graduates, but loan consolidation offers students an easy way to managetheir debt at no extra cost.
According to The Baltimore Sun, estimates showed that morethan $50 billion in student loans were granted in 2004 and outstanding studentloans now total about $357 billion. This may be because many graduatesare finding themselves out of school with no job, or job prospects, and facingloan collectors demanding the return of money owed to them.
The Federal Loan Consolidation program makes student loanrepayment more manageable by allowing the borrower to bundle his existingvariable-rate federal loans into a single, fixed rate loan at rates as low as1.25 percent.
Loan consolidation not only lowers monthly payments fordebtors, it allows you to repay your loans over a 25-year period and fixes yourmonthly payment amount over the life of your loan.
“If you consolidate your loans your monthly payments will bea lot less,” said Leslie Valteau-Wimbley, a Southern University graduate insecondary education,
For Wimbley, consolidating lowered her monthly payments by$100.
This is a welcomed relief for students who are being forcedto finance loans because of other federal aid shortcomings.
“My parents made too much money for me to get a grant, butdidn’t make enough money to pay my tuition up front,” Valteau-Wimbley said.
Valteau-Wimbley and other students in situations similar tohers, are the very reason loan companies have been granting record numbers instudent loans last year.
For students who are forced to finance student loans to paycollege fees, the option of consolidation can be a smart alternative to preventgoing into default for loan debt.
“I’d do it,” said Jeannie Brown, a senior majoring incomputer science. “It seems easier for paying the loan back and it would savemoney.”
Currently, the company NextStudent offers loan consolidationto graduates with a starting interest rate of only 2.88 percent. There’s alsono credit check or cosigner needed to qualify for consolidation with thecompany.
