Consolidation of Debt and Student Loans

So you have finally got the degree, but were you surprised with what came along with it? A pile of debt and student loans that need to be paid back starting very shortly after college! Whether it is a Federal PLUS Loan or a loan obtained from your local bank, chances are that a college graduation also brings collection agencies to your mailbox, as everyone wants to be paid back for helping to provide you with a college education. But, while you are writing out all these checks to different loan agencies, have you considered and thought consolidation through yet? Better, yet, do you even know what consolidation is?

How Consolidation Works

The consolidation of your student loans can save you hundreds and thousands of dollars in the long run when it comes to your student loan debt. Here is how it works: When you applied for those student loans from different government agencies and loan companies way back when, they each gave you a different interest rate and payment plan for eventually paying them back. Consolidation takes all of these different loans, repackages them into one convenient loan, and then gives you the ability to pay one loan back over time. Therefore, if you owe 5 different companies payments for your student loans and debt, consolidation allows you to now pay just one central company back, thus saving you time and money with a lower interest rate and less checks to write each month.

How Consolidation Helps

Consolidation of your student loans can happen right away, as you can visit different loan companies that offer consolidation after college and start saving money right away. Consolidation combines all of your debt into one neat and tidy bill that can be paid off much easier and in a more timely fashion than other options. Why deal with the baggage of 4 or 5 different loan companies nagging you for money, when you can pay one company off and live without that constant hassle? Check out consolidation today, and save yourself from the headaches of student loan debt.

Consolidate Loans Before the Rate Change!

Have you ever heard the old adage, "There is no time like the present"? Well, if there was ever a time that that advice was very necessary, today is the day, as when it comes to debt consolidation on student loans, today is definitely the day to consolidate. Debt consolidation on your student loans can help you to save hundreds of dollars every year, as it helps to cut down the interest rates that you are currently paying on a variety of different college student loans. By cutting down these interest rates, you pay less money to repay your student loans. And the present just happens to be the best time to complete this process, as consolidation rates are so low that you can save even more money these days by using debt consolidation on your student loans!

Student Loans Are Such A Drag!

Student loans are, quite often, a very painful process for many people. If you did not get the job that you expected out of college, it can be a real burden to pay back these loans for services that you do not feel helped you out. Alternatively, you may be doing your dream job, and giving up money from that job for something that already happened is not always the best feeling in the world. But, regardless of your situation, college loans are just a lingering aftereffect of your past that you would like to eliminate as quickly as possible.

Apply Now For Low Rates

Though it may be hard, the present day rates on debt consolidations can at least bring your bank account some level of joy, as you will not have to repay as much money for your student loans as you might have previously expected! Debt consolidation these days make the process of repaying student loans more painless, and with rates these low, it would be a shame for you to miss out on the opportunity to save yourself some money. Scan the Internet, on web sites like NextStudent and many others, to find the consolidation plan that works best for you and your student loans. But do not delay: there truly is no time like the present!

Consolidating Federal Student Loans Keeps Graduates on Course

Although many people have achieved the dream of completing their college education, many of them face an unfortunate downside following graduation: paying back the inevitable student loan.

Too often it is not just one loan looming over students, many of whom have yet to settle into the sometimes overwhelming realities of the workforce and daily life.

NextStudent, one of the nation's premier education funding companies, can be the proverbial light at the end of the tunnel by helping students consolidate their multiple federal loans. From Stafford Loans and Perkins Loans to PLUS Loans and HPSL Loans, NextStudent's Federal Student Loan Consolidation Program equals convenience.

"Although the 2.77 percent interest rate on federal loans was at an all-time low between July 1, 2004 and July 1, 2005, the lowest the rates ever had hit in history, now is still a good time to consolidate," said Andrew Ernstrom, education finance adviser at Phoenix-based NextStudent.

Currently the interest rate is in the 5 percent range and is expected to again increase in July 2006. The cap on the program is 8.25 percent, but projections for the next increase are between one or two points.

"Everyone knew the rates were going up about 2 percent this past July 1," Ernstrom said. "So there was a mad dash nationwide to get everyone's loans consolidated," which allowed borrowers to take their variable rate loans and then lock them into a fixed rate.

Historically during the past 40 years interest rates averaged closer to 7 percent.

An important aspect of consolidation includes the six-month grace period. "Make sure to consolidate while you're in the six-month grace period because you get a cheaper interest rate," he said. The rate increases .6 percent when the grace period ends.

Students have been gung-ho about federal loan consolidation. "The only reason people wouldn't consolidate is because they don't think the rates will go up, but all the trends out there say they will, so it makes sense to do it now," Ernstrom said. The interest rates for student loans are set up off of the 91-day Treasury bill. Since May 30 when the rate was reset, the rate increased about .92 percent. "If the rates were reset today, everyone's rates would be .92 percent higher. And by next July who knows how high it could go," he said.

NextStudent's Federal Student Loan Consolidation Program extends loan payments up to 30 years, depending on a borrower's balance. As many people originally take out loans on a 10-year repayment plan, consolidation offers the same interest rate on the same amount of money but at a longer term, making the payment much more affordable. There are no prepayment penalties for the program, so borrowers can pay off loans at their own pace and have the benefit of a longer term if needed. Consolidation can decrease some payments up to 60 percent.

Even if students already have consolidated, NextStudent can help further lower their interest rate with reconsolidation, which allows borrowers to reset their forbearance and deferment rights, take advantage of new industry discounts and also can lower their payment.

"In the past students who had consolidated did not have the opportunity to consolidate again unless they took out new student loans," said Katie Carpenter, education finance manager at NextStudent. "In the past few months the Department of Education has allowed all previously consolidated loans to be reconsolidated," she added.

In turn, consolidation is the answer not only for students paying back their loans but for lenders. According to the Oct. 23, 2005 article titled "College loan plan raises questions" at NCTimes.com (North County Times) by J. Stryker Meyer, "A General Accounting Office report noted that people who consolidate their loans are three times less likely to default on their student loans."