Student loan debt keeps going up every year, and college and graduate school costs have gone up faster than inflation, even though interest rates on federal student loans are close to all-time lows. Studies done by the National Center for Education Statistics show that about half of recent college graduates have student loans that are, on average, in the $10,000 range. With these kinds of loans, the average cost of college is going up twice as fast as inflation.
Included in the requirements are a grace period and active debt repayment.
For student loan debt consolidation to be possible, the student must no longer be in school and be in the "grace period" of the loan. Or, he should be making payments on the loan, and the minimum loan amount that most consolidation companies require is usually $10,000.
Students can get cash back for consolidating their student loans through some student loan debt consolidation programmes. And the more money you owe, the more money you get back. Also, interest rates can be low and can't be higher than 5.4%, and you can get a 1% discount after making 48 payments on time in a row.
Also, the best student loan debt consolidation programmes do lower the interest rate by a quarter of a percent if the student uses an automatic debit programme to pay back their loans. There may not be any fees or penalties for paying off the loan early, and you may only have to make one monthly payment to a single lender. Like any other debt, student loan debt can affect the student's credit (in a good or bad way) and affect what they do in the future. For example, a student whose student loan debt is more than 8% of their income will have a bad credit score when they try to get a loan in the future.
For a student to consolidate his or her student loans, he or she must be in grace, repayment, deferment, or default. If the student consolidates variable-rate Stafford loans during their six-month grace period, the interest rate will be 0.6% lower after consolidation.
Before consolidating student loans, the student should be careful, and it's best for them to do it at the current interest rates and hope that they'll go down in the future. For students who took out consolidation loans during their grace periods, the loans will go into repayment as soon as the consolidation is finalised. This means that the grace period will be lost.
