Students dependon student loans to help them gain their education. Without the help of federal loans many would not be able torecognize their college dreams.
“I have two sonsin college and without loans they would not be able to attend schools out ofstate” said Dianna Robinson, a mother with sons at two HBCUs.
With thefreedom that the loans provide, they also carry the deep responsibility ofrepayment. Defaulting on a student loan can have steep penalties likeprohibiting tax returns and making it harder to qualify for a mortgage.
Sallie Mae, acompany that facilitates many federal loan programs including the Stafford Loanhelps students determine if considering student loan consolidation is a goodoption.
Consolidationis a process in which a single lender repays all of the individual loans andthen uses the weighted average of the current interest rates and rounds it tothe next eighth of a percent.
The formula bywhich your interest rate is figured is federally mandated, but counselors withSallie Mae suggest that students consider consolidation right after graduationwhen interest rates are at there lowest.
The term inwhich you have to repay the loan varies by the amount that is being repaid; anyamount over $60,000 has the maximum term of 30 years.
There are manydifferent options available for debt repayment; students that consider theiroptions early have the benefit of adjusting their budgets now.
“Aftergraduation I wasn’t really worried about paying back loans because I alreadyknew how much I would have to send a month and took advantage of low fixedinterest rates to get the lowest payment possible” said Sam Touch, a graduateof DeVry.
