Debt Management Article
Before deciding on a Student Loan Consolidation
Now that you have achieved your goal and gained a college degree, your
next step is to work out the best way to live with or pay off the debt
you have accumulated. It is not unusual today to find that the annual
salary is less than the student loan. There are, however, ways to get a
handle on your debt so that your finances are manageable.
The best advice to gain financial control does not necessarily come
from institutions but could be from someone who has confronted this
problem before. Once graduated students are confronted with numerous
offers to embark on one or other student loan consolidation plan.
Remember also that interest rate changes on 1st. July every year. And
on July 1st, 2007 the rate will increase slightly by 0.08%
The six months following graduation is your grace period and you can
find lower interest rate but be very careful in your research. Your
student loan could take years to pay off so it is important to save,
reduce bills and budget whether you have a student loan consolidation
or not. Most students focus so much on graduating, they know little of
their Federal or Private loans. In a small survey, 78% of students when
asked replied that they spent less than a day finding out and
organising their financial options.
With a student loan consolidation, your monthly repayment will be lower
and if you do nothing further, you can be in debt for several years.
When your income increases and you are in a position to increase your
monthly repayment, you should take steps to arrange this.
So for the two million students, who graduated this spring, if you have
debt, familiarise yourself with what is available and best for you. Dan
Thibeault, President of Graduate Leverage, said, “Most recent graduates
don’t have the time to interpret their loan portfolios- combine this
with many one-size-fits-all financial advisory services telling
everyone to consolidate, and many graduates find themselves burdened by
unrealistic debt loads and repayment plans.”
Do bear in mind when considering a student loan consolidation that you
are aware of your projected income. In addition some careers carry loan
forgiveness plans. This includes careers such as teaching and social
work.
