Student Loans

Student loans are an unwelcome gift left with many graduating students.  The cost of higher education today has become exorbitant in many instances necessitating students going deep into debt.  Congress recognized the damage arising from this debt, and in 1986 enacted the Federal Loan Consolidation Program.  This program facilitated the consolidation of various types of student loan debt.

After this inception of this program students were able to consolidate several classes of student loans including PLUS, Stafford and Perkins loans into one new aggregate loan.  This new loan had longer pay back periods thus lowering the associated monthly payment.  This period can range from ten to thirty years.

The new interest rate for this consolidated loan is equivalent to the weighted average of the former underlying loans.  Student loans of most all variety have lower interest rates than credit card or retail store debt.  It is imperative to seek student loans before accessing higher interest credit lines to help finance your education.  However, many students find falling back on credit cards unavoidable when confronting the mundane expenses of everyday life.

For those falling into this trap there is debt management guidance offered from many sources.  Many colleges now have free counseling offered on campus.  There are also several non profit services which can offer valuable advice.  When over your head the first step is to seek a wiser party to guide you. 

Many programs have arisen today which offer to pay off your student debt in return for working in a given profession or geographic area for a stipulated period of time.  Common examples are foundations seeking to encourage those to go into teaching or to provide various services in disadvantaged areas.  This can be a very fulfilling route to clearing your student loans in full.