Student Loan Consolidation Lowdown

As a student you need to worry about one thing — debt, especially credit card debt. Being in debt has become a way of life for a majority of Americans, and we begin young — you’re just out of high school and if you want to study any further, you need loans and have to begin thinking of repayment. And there are other expenses as well like tuition, food, rent, and other incidental expenses. Only a student knows how difficult it can be to make ends meet.

One thing that you will notice once you enter college is how credit card companies solicit you and make you take their cards. Reason? For one, young people don’t usually have a credit history. College credit cards are a good and often necessary option for many students, but you can easily fall into a debt trap if you are not careful. All it could take is a few beers extra or buying something that you really wanted. What can you do to keep your debt within limits? CNN.com reports:

Just say no to cash advances. A common trap that many students fall into is getting a cash advance from their credit card just so they don’t have to call Mom and Dad to ask for money.

Read more: Credit card tips for college kids

Dwindling state and federal aid, lower endowments and drops in fund-raising have forced many colleges and universities to raise tuition and cut back on financial aid. This means you suffer the burden of high fees and don’t know if you should continue with higher education since you may be paying back the loan for the rest of your life. A very real scenario, but don’t get upset. This country is not called the land of dreams and innovation for nothing. (Well if it hasn’t been called so yet, let’s begin calling it that way from now on.)

So, where was I? Yes, as I said before, don’t be disheartened yet. Did you know that you could pay for college or at least some part of it using some really innovative methods? These creative methods keep your college dream on track and help you reduce your debt burden as well. Interested? Read on:

Accelerate your degree: Never heard that one before? Well, accelerated classes cram a semester’s worth of material into six- or eight-week sessions. The classes are intense of course, but they really help to move up your graduation date. You land the degree you want at a much lower price.

Check if your college offers accelerated degree programs. Quite a few schools do offer bachelor’s degree programs in three years instead of four. However, you must remember that an accelerated degree program is a great option if you have a clear career goal. You should be ready to work real hard. If you are, then go ahead and put your college education on the fast track.

Contact your rich uncle: Don’t have one? Don’t worry. Just get onto the website MyRichUncle, which provides money from private investors to college students who need help with education expenses. In return, you have to agree to pay a fixed percentage of your gross future income for a fixed period.

Agreed, a college education is a great investment and a college graduate can easily expect to make $1 million more during his/her lifetime than someone with a high school diploma. There’s only one slight problem in this rosy picture –it’s becoming increasingly difficult for college graduates to pay off their student loans. Today, there are a large number of options to help students with the repayment. Fortwayne.com reports:

Students should choose a repayment term carefully and be sure they understand the rules regarding student-loan repayment and the options for consolidating loans.

Read more: Empty pockets plague grads

Every student needs to worry about one thing — debt, especially credit card debt. Being in debt has become a way of life for a majority of Americans, and we begin young — you’re just out of high school and if you want to study any further, you need loans and have to begin thinking of repayment. And there are other expenses as well like tuition, food, rent, and other incidental expenses. Only a student knows how difficult it can be to make ends meet.

One thing that you will notice once you enter college is how credit card companies solicit you and make you take their cards. Reason? For one, young people don’t usually have a credit history. College credit cards are a good and often necessary option for many students, but you can easily fall into a debt trap if you are not careful. All it could take is a few beers extra or buying something that you really wanted. What can you do to keep your debt within limits? Three things:

• Never neglect to pay the minimum payment on your college credit card as it can quickly develop a bad credit rating that will prevent you from obtaining future credit cards, lines of credit and other funds.
• Never roll over: To build favorable credit ratings, spend regularly on your student credit card, AND pay the balance off each month before it has a chance to roll over.
• Stay within your budget: If you are a super rich brat, this advice isn’t for you. But if you are one of the regular guys, you must know your limits and stay within them.

Although students are always preached to be up on toes and be alert but in the loan economics, delaying things might turn out to be a healthy proposition. Those who were still to go for a locking of their fixed rates for their educational loans before this June end deadline were gifted with a chance to save a little more money. It came about as a result of a provision buried in a bill providing extra defense funding, which allowed student borrowers of federally guaranteed loans from only one lender to shop around for the best deal. Similar to this, many such incidents take place.

Speculation could be paid some heed and having some information from the market gives fair indication about kind of provision might take a change. Keeping a tab on the market forces helps too but most importantly, following your intuition to be laid back sometimes do help. Keep you finger crossed!

Taking a student loan is a necessity that most students cannot do without. However, that doesn’t mean you should reel under a debt spell from which there is no escape. Yes, debt is inevitable but there are a few things you can do to reduce your debt burden. One of the first things you can do is understand your financial aid package. Some scholarships or grants require students to maintain a certain grade point average or some other caveat to keep their funding.

Students should not stop exploring grant and scholarship opportunities even after being accepted as a freshman. It may take an investment of time, but it can yield great benefits. Web sites and your financial aid advisor can offer places to look for these opportunities. Mywebtimes.com reports:

Do not borrow more than you need. While you may be preapproved for a certain loan amount, that doesn’t mean you have to take it all. And do not borrow money for unnecessary items, such as spring break vacations or a new car. All of that money has to be repaid — with interest.

Read more: 7 tips for taming college debt

This one isn’t about consolidating your student loans, so you can relax and stop worrying about interest rates. But every student needs to worry about one thing — debt, especially credit card debt. Being in debt has become a way of life for a majority of Americans, and we begin young — you’re just out of high school and if you want to study any further, you need loans and have to begin thinking of repayment. And there are other expenses as well like tuition, food, rent, and other incidental expenses. Only a student knows how difficult it can be to make ends meet.

One thing that you will notice once you enter college is how credit card companies solicit you and make you take their cards. Reason? For one, young people don’t usually have a credit history. College credit cards are a good and often necessary option for many students, but you can easily fall into a debt trap if you are not careful. All it could take is a few beers extra or buying something that you really wanted. What can you do to keep your debt within limits? Three things:

1. Never neglect to pay the minimum payment on your college credit card as it can quickly develop a bad credit rating that will prevent you from obtaining future credit cards, lines of credit and other funds.
2. Never roll over: To build favorable credit ratings, spend regularly on your student credit card, AND pay the balance off each month before it has a chance to roll over.
3. Stay within your budget: If you are a super rich brat, this advice isn’t for you. But if you are one of the regular guys, you must know your limits and stay within them.

As July 1 draws nearer, the clamor for consolidation is increasing. Increasing numbers of so-called student experts are giving their two bits on the situation and are trying to influence students. There have been quite a few articles about consolidation, benefits and drawbacks. Some of these reports mention closing costs as a factor to watch for when consolidating a student loan. Here’s an important tip for students who are planning to consolidate their student loans.

Students should note that there never are closing costs when consolidating a federal student loan. You should also realize that when you consolidate, you are essentially agreeing to increase the term of loan from 10 years to nearly 25 or 30 years. This will of course lower the monthly payments considerably, but it will also increase the overall interest you will be paying during the life of the loan. Also, you must realize that when you consolidate, you might as well take your entire working life to repay your loan — 30 years is a very long time.

If you want to lock in the rates then there is no better option than consolidation. But if you are not prepared to repay your loan over a 25 or 30-year period, you could try an alternative. One of the best things to do in such a situation is to lock in the lower interest rate, and then attempt to pay the loan back within the original term. This will reduce the interest costs AND you will be rid of your student loan in just 10 years — a worthy bargain if you ask me. And the best part is that there’s no early payment fee with federal student loans.

The teen years are a time to experiment. So, if you feel like doing drugs, it is probably your urge to experiment. But if you are serious about making it through college, then it is best to let go of this one urge. It is just a small step from trying it a few times to becoming addicted and then you may end up having a run up with the law — something that could jeopardize your chances of getting a loan in college.

According to recently released research, over 31,000 California college students forfeited their shot at federal financial aid because of a past drug conviction. Last year, 2,219 Californian students were denied federal financial aid because they admitted to a prior drug bust. While this is discriminatory, and possibly the restrictions will be loosened, you still probably need to be careful for the time being. The revised law renders students ineligible for one year following their first conviction for drug possession. Students convicted of selling drugs would lose eligibility for two years. Multiple convictions can lead to a permanent ban.

I’m sure most of you are bone-tired of hearing that it’s a now or never time for consolidation. And you are probably in a flurry and want to do it as soon as possible. But remember the lessons we learnt in childhood? Slow and steady wins the race! Well, this is a prime example of how trying to speed up things could mean a world of difference. 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.

But don’t forget, you have very little time left. The clock’s ticking and July 1 isn’t too far away!!