Many Americans today are dealing with a great deal of student loan debt upon completing their college undergraduate or graduate degree programs. These debts can greatly exceed $100,000 for many students who have gone in to graduate degree programs (typically law school and med school students). Due to the fact that these debts are so high for students, many lenders today are giving students the opportunity to refinance their student loans or consolidate them, especially if they have various loans from graduate and undergraduate schooling. Depending on the type of loans, how much is in question, and how much has been paid off, consolidation might be a great option for certain students to consider.
For those who have a student loan debt amount that is extremely high, you may want to consider consolidation. This is going to allow you the opportunity to take all of the individual loans you have, and consolidate them to one debt sum, meaning a lower monthly payment on the loans. This option is a great one for students who have various private lender loans, and are in a great deal of distress trying to meet the financial burdens of their student loan debt amounts. So, if you are considering consolidation, it is best for unsecured, private loan lenders.
If you have a high amount of government (subsidized or unsubsidized) debt, the payments are not going to be as high as with a private lender. For those who were fortunate enough to have only government based loans, you will find that the interest rates are very low (less than 6% with most loans), so the payments are not going to be as high. For this reason, you should consider making the monthly payment at the minimal amount, and focus a higher amount with private lenders (if you have any of these loans), due to the fact that the interest rates are much higher. If your lender allows you to consolidate, it might be an option to consider if you are having a hard time making ends meet, and getting the payments made on a monthly basis.
A great thing with student loan debt is that you can ask for deferment of the debts. If you lose your job, are going through tough times financially, or are having a hard time making the payments, government lenders (as well as some private lenders), allow you the option to defer your loans (generally for 6 months at a time). This gives you the opportunity to focus on other debts you owe, without going in to default on student loans, which is something you do not want to do.
No matter how much you owe, or what kind of loan it is (government or private, subsidized vs unsubsidized), there are many factors to consider when dealing with your student loan debt. Knowing the requirements, knowing how much you have to pay, and knowing what consolidation options you may have, are all things students should consider, in order to minimize the huge burden many of them face with these high amounts.
About the Author
Mark Thornton is a college graduate who blogs about paying off his student loans with money management tips.
