For young adults today, going to college is often one of the most important choices they could make. The economy is still recovering from one of the worst recessions to every hit the country, and employers aren’t hiring the way they used to, so if they want to have a good job and move out their parents house then college is the logical step to take. But the price of a higher education has risen tremendously is the past couple years, with college students graduating with an average of $27,000 in student loans.
It gets worse. The United States now has over $1 Trillion dollars in outstanding student loan debt, with that amount growing by a rate of $2,853.88 per second. That’s insane. With the economy still in a fragile state, the job market for recent grads is still a little weak, making it difficult to support all the young adults looking for a good job. So not only are recent college graduates unable to find good jobs, but the large amount of debt they carry discourages many of them from becoming entrepreneurs, hurting the chances for the next big thing to get created.
But there’s hope for college students out there. Recent grads can take advantage of many different strategies that could help lower and get rid of their student loan debt completely. One such strategy is student loan consolidation, which allows students to combine all their outstanding bills into one, lowering the amount of money they have to pay each month. Consolidation works great if you’re burdened with many different types of loans, such as credit cards, auto loans, a mortgage, and more.
You can consolidate all those different types of loans in one, paying a lower bill each month, but often times extending the amount of time it’ll take you to pay off said loans. Student loan consolidation could be the relief college grads are searching for that will allow them to have more money in their pocket every month. But consolidation comes with it’s own set of risks that you have to be aware of. For one, the times it takes to pay off a consolidated loan will often times increase, meaning you may end up paying more money to the banks in the long run.
Student loan consolidation also helps lower the interest rate you pay every month, but that comes with a catch. The interest rate is based entirely on your credit score, so if you have bad or mediocre credit, then getting a good interest loan will often times be difficult. Banks also like to offer consolidation without lowering the interest rate at all, so not only will you be stuck making payments for a longer period of time, but it could often times cost you a lot more too. Consolidation also depends on what type of loan you have, and who you borrowed the money from.
Federal student loans are often easier to consolidate than loans from private lenders. Although it may seem like a daunting task, if don’t right, student loan consolidation could be one of the most important steps you take to get your life back under control. Always remember to do your research to make sure the deal you’re about to sign will help and not hurt you and your future.