You did it! You scrimped and saved and studied and worked and borrowed more money than you ever have in your life, but you did it! You finally finished school. Most likely, you’ve got a few months of grace period to get settled into your new job - hopefully it’s in the field you studied for - and then those student loan payments are gonna start coming do. Plan now to keep your expenses in check while ensuring that managing your education debt is a part of your long term financial plan.
Federal family education loan consolidation is probably the first place many borrowers will look. FFEL consolidation offers programs to consolidate both subsidized as well and unsubsidized loans. In some cases it is possible to get an FFEL consolidation loan even if you have been in default on your loans in the past. FFEL consolidation loans often offer fixed rates, and extended terms which help those just entering the workforce to lower their monthly payment.
Of course not everyone was fortunate enough (or thrifty enough) to have their federal loans cover all of their expenses while in school. People who needed Private loans aren’t left out in the cold though. Many companies also offer consolidation packages that will let you put all of your private loans into a single payment. Private consolidation offers many of the same benefits as an FFEL consolidation, but be aware that FFEL and private loans cannot generally be consolidated into a single package. You may need to get two separate consolidation loans, one for your federal loans and another for the private ones.
Parents who borrowed on their children’s behalf can also consolidate their loans with a PLUS loan consolidation. Again, extended terms and fixed rates make the monthly sting of payments a little easier to bear, though parents will want to explore a variety of options to ensure that they are making the best deal when consolidating their PLUS loans.
Even if none of the traditional consolidation methods work for your situation, there are still alternatives to help students get started on the right foot towards financial solvency. Some people take out second mortgages on their home and use the money to pay off all of their loans. ( An added benefit of this method is that you may be able to retain some of the tax benefits of regular consolidations) Private personal loans from family members can also help those with poor credit, and some companies offer tuition reimbursement programs which may help off set up to 100% of your education costs.
New technologies have come to the lending world where the idea of peer-to-peer programs and micro-financing has taken root. Peer to peer financing allows the borrower to present a request for funding to a group of potential “micro-investors” who then bid on the loan by offering different rates and terms. Once a deal is struck the network services the loan, ensures payments are made and the necessary paperwork is taken care of. For borrowers with needs outside the comfort zone of traditional banks a P2P loan may help them get started down the path to getting their loans paid off.
Sure you busted your tail in college but now it’s time for the real world, which will have its own share of challenges. Nobody want to start out with a huge burden hanging over their head; student loan consolidation can offers the cancel to reduce all of your loans down to just one or two manageable payments each month so that you can concentrate on working your way into that corner office.
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