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Federal Debt Consolidation Loans For Students
By: Roy Thomsitt
For American students, the U.S. Government came up with a plan that can help a
student manage their student loan debt. The plan they came up with is called a
Federal Direct Consolidation Loan. It does not matter if you are a recent
graduate student, well into your career already, still at school, or in your
grace period for repayment of a student loan. For any of those student
categories, a Federal debt consolidation loan may be applied for.
Students successful in their application for a federal debt consolidation loan
may reduce the amount they need to repay each month, or increase the time that
they have to pay off their current debt.
How Does a Federal Debt Consolidation Loan Help a Student Pay Off Their Debt?
For a student who has student loans under several different programs, bringing
them all together under one direct Federal Debt Consolidation Loan can make your
debts easier to manage. By combining all of your loans into one, you're only
responsible for making one payment to one lender - the U.S. Government. To help
make the option of debt consolidation more attractive, there are four flexible
payment plans available, including two that which take income and/or income
expectations into account.
The Federal Debt Consolidation Loan is Available to Help you Manage your Student
Debt.
Student loan debt is not something that you want dragging at your feet like a
ball and chain. It provides a good opportunity for students to learn to manage
their finances. Even if you are still at school, it is a good time to learn to
manage your debt. That will hold you in good stead as a consumer long into the
future. For example, if you choose to consolidate all your student debts into
one before you leave school, you can lock in an interest rate that as much as
.6% lower than if you attempt to refinance later, after you have left and are no
longer a student.
For more how a Federal Direct Consolidation Loan can help lower your repayments,
and manage your student debt, you can visit the Department of Education's web
site. Once there, you can make use of their online debt calculator at https://loanconsolidation.ed.gov
to estimate your projected monthly payment under the various plans.
Can a Federal Direct Consolidation Loan help you manage your debt?
There could be reasons why debt consolidation is not the best solution for any
particular student. If a student is close to the end of their repayment term,
for example, it may not be worth the work to consolidate. Prolonging the life of
your loan is likely to increase the amount you pay overall. If you can afford
the higher monthly payments to pay off the debt sooner, you can ultimately save
money by doing so.
If, however, you are sure that a Federal Direct Consolidation Loan will be to
your benefit, you still need to be eligible for the program. The eligibility
guidelines can be found at loanconsolidation.ed.gove/borrower/beligible.html In
addition, the list of loans that are eligible for consolidation can be viewed
at: loanconsolidation.ed.gov.borrower/bloans.html
Which Federal Student Loan Consolidation Plan is the most suitable for you?
Here are the 4 consolidation loan consolidation plans that are available to
choose from:
Standard: The standard repayment plan is fixed-rate, and runs for a maximum of
10 years. The minimum monthly payment is $50.
Extended Repayment Plan: this is a fixed rate plan, with payments extending over
the course of 12-30 years. Payments are a minimum of $50, and the life of the
loan is dependent on the total amount of the debt.
Graduated Repayment Plan: Under the graduated plan, payments start low and
increase, generally every two years. The length of the repayment period can vary
from 12 right up to 30 years.
Income Contingent Repayment Plan: The monthly payment is based on a borrower's
annual adjusted gross income, family size and the total amount of direct loans.
If your student loan debt is out of control, or could be better managed, it is
worth paying a visit to: https://loanconsolidation.ed.gov to see how the federal
government can help you with a debt consolidation loan for students.
About the Author:
This student loan consolidation article was written by Roy Thomsitt, owner of
www.eliminate-credit-card-debt-now.com |
