Student Loan Consolidation Lowdown

– By Priya Jestin, Staff Writer

The cost of education is putting a heavy strain on you. But you may not realize that it is putting an even heavier strain on your parents. Despite scholarships and gifts, students still need some more money to get through college. And the worst part is that parents with one or more children are finding it difficult to get as much loan as they would like to have because their finances are already stretched to the limit.

This applies to people who belong to the upper strata of society where double incomes help insulate the burden of loan to some extent. However, their finances are hurting and it shows. Today, the top priority for parents is saving for their children’s education. Retirement plans and savings have taken a backseat thanks to the high cost of education.

– By Priya Jestin, Staff Writer

Planning to take a loan? You are probably faced with the two big loan questions: how much and from where. You may have run the entire gamut of loan houses and checked the rates and best options available.

But you probably have overlooked these sites that offer unbelievable amount of assistance to students. These loan resource sites not only offer the best possible terms but also have attractive repayment modes:

National Council of Higher Education Loan Programs (NCHELP): NCHELP’s guaranteed loan assistance consists of four different loan programs: Federal PLUS Program, subsidized Federal Stafford Loans, unsubsidized Federal Stafford Loans, and Federal Consolidation Loan Program.

Information for Financial Aid Professionals (IFAP): IFAP is a Department of Education site, which contains numerous useful publications for professional financial aid counselors.

Project EASI – Named Easy Access For Students and Institutions, this site provides information on topics ranging from how to manage your debt, loan consolidation, and what to do if you default. The site aims to make life easier for anyone who must repay a student loans by providing relevant and useful information.

Direct Loan Program - This is a Federal Student Aid program that provides students with a way to borrow money to pay for education after high school. And the best thing about this program provided by the Department of Education is that borrowers have flexible repayment options.

The Department of Education (DOE) also offers numerous resources on deferment, rehabilitation, postponement and other kinds of financial aid for repayment.

Are you a student who is registered with the Student Health Insurance Plan (SHIP)? In the next few weeks, you can expect to see a survey in your e-mail account asking what you would like to change about your insurance plan. Arbiteronline.com reports:

"A lot of students on campus are just uninformed about what is available to them, and then if they do take the insurance what exactly they have available," said Pat Branson the Student Health Insurance Plan manager.

Read more: Student health insurance goes up for bid

Imagine having a debt of nearly $30,000 at the age of 22! That’s the situation most young graduates especially young women, find themselves in. When they graduate from University, their entry into adult life begins with a slow crawl from student loans to solvency. Twincities.com reports:

Nationwide, 20- and 30-somethings such as Ingram are surprised to find that early debts can have a far-reaching impact on the quality of their lives. And while all young people are struggling, experts say, young women between the ages of 18 and 34 may be suffering the most.

Read more: Debt weighs heavily on women in their 20s and 30s

While marriage is a time for joy, nowadays, it involves much more planning than choosing a wedding gown, venue, cake and honeymoon destination. Nowadays, many young people enter a marriage with some kind of debt. Usually most youngsters carry a huge student loan debt that they want to repay ASAP and then of course there are the credit card debts, car loans, and what not. All these may be a big drain on your resources.

When tackling debt, try to first pay off credit cards or other consumer loans like a car loan with high interest rates. Since your student loan has a much lower interest rate, don’t be in a hurry to pay it off. These loans can usually wait for some more time. But that doesn’t mean you can tarry them off forever. Always strive to pay off debt as quickly as possible to reduce any troubles in future.

Nowadays, there are loans aplenty for students of almost any kind of subject. You just need to know how to apply and how much to apply for. Medical students have innumerable private student loans available to them. This is mainly thanks to their earning potential, and the fact that few students leave medical school before getting their MD.

Borrowing limits vary by lender, but most lenders offer up to "full-expense less aid". This “full-expense" can sometimes defined rather liberally. There are also unsubsidized Stafford Loans (Federal Student Loans) available to medical students. However, ensure that you get competitive rates for your loan, as a physician’s salary growth is quite slow, at least initially. Studentdoc.com reports:

Medical school loan debt, especially high-interest rate debt, is a growing problem. The AAMC (1) recently reported that over the past two decades, the cost of private medical schools has risen 165% and the cost of public medical schools has gone up 312%. A similar study by the AMA (2) found that medical school costs have been increasing at a faster clip than inflation. On average, medical students graduate with about $100,000 in debt.

Read more: Medical School Loans

Are you considering consolidation. It is a big step and it is okay to be jittery and worried. Any kind of loan is a bit of scary proposition and a student loan more so. Education has become so costly today and repaying those huge loans can even take decades. So probably consolidation is not such a bad thing after all. The best way to consolidate and get the best deal possible is to do it slowly and thoroughly.

It is important for you to check around, and ask many questions before you choose the loan that’s right for you. And the most important question you need to ask even before you begin shopping is: Do you need to consolidate? Not everyone needs to so it is important that you do your math properly and find out if consolidation works for you. If it does, then you can move on to the next step.

If your need is to stretch out the repayment period or lock in the prevailing rates, then you definitely need to consider consolidation. So, if Sallie Mae holds the majority of your loans, then it is best to approach them first.

However, if you are still confused, then it is best that you meet the financial-aid officer at your school and work out your options. So once you’ve worked out all the pros and cons of consolidation and decided to go for it, then the next most important step is choosing the best lender. If you’ve taken out a couple or more loans, then the best lender for consolidation would be the one that holds most of your loans. In case your present lender does not offer consolidation loans, then you can shop around elsewhere.

Today the competition is more than ever before among students vying for limited financial resources. In such a scenario, a few things can help you ensure that you are not left high and dry. It is imperative to compare the financial aid sources. You must look at various factors like loan fees, repayment terms, interest rates, other requirements and whether the loans are guaranteed. This will help you decide which loan works best for you.

One of the ways you could reduce your cost is by making the right choice of school or college. If going to an expensive school will mean taking on more loan, then isn’t it better you considered public universities. Assess the total cost of attendance, including living costs and travel costs to know which education institution is a viable option.

Agreed student loans are good debt and that it will turn into an asset. But what happens when it doesn’t turn out that way? What happens when you take on loans that in many cases will take decades to pay off? What happens when people increasingly can’t pay? Delawareonline.com reports:

Since the 1990s, the number of students who graduate with over $25,000 in loan debt has tripled, according to the student Public Interest Research Groups, which along with several state student associations last year launched the Student Debt Alert project.

Read more: Options for student loan debt relief

As 17 million college students make their way to campuses across the United States, there is one fear gnawing at the minds of University heads. Nearly a dozen states have made it extremely difficult for card companies to market on public campuses however, there is still the fear that young students will fall prey to their aggressive marketing tactics. Statesmanjournal.com reports:

But these steps belie a stark reality: Credit-card marketers are as aggressive as ever about reaching students. Some solicit students, by phone or e-mail, and flood their mailboxes with credit-card applications. Other marketers set up tables around heavily trafficked campus areas, hawking free sandwiches or pizzas to hungry students to get them to sign up for a credit card.

Read more: College students are a ‘prime target’ for credit-card companies