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These days, graduate and college students have been facing some challenges like:

  • Selecting the appropriate study field or major
  • Identifying a way to meet their educational expenses
  • Focusing and working hard to complete their studies on time

The above three are common challenges faced by students when pursuing higher studies. But those who have availed multiple loans for their studies will only find their challenges to be the entire tougher.

Why have student loans been stated to be tough to be paid off?

For several reasons, student loan debts could persist for a longer duration. Firstly, the debt could be huge, amounting to even thousands of dollars. Besides this, students have taken out loans at higher interest may have opted for a longer duration of repayments. Repayment can be a challenge even for those opting for a shorter time frame since it will mean higher repayments to be made every month. Life may become tough for such students as they also are required to pay other expenses besides the loans. Multiple loans will mean juggling between multiple amounts, repayment terms and payment due dates. “Should i consolidate student loans” is the question that is commonly asked by the students, to which the answer is “Yes”.

Should I consolidate student loans: Solution

The monthly loan payments can be reduced and payment schedule simplified only by availing an excellent solution like loan consolidation. It will imply having all the outstanding loans to be rolled into an individual umbrella loan. In such type of loan, the person just needs to pay fixed interest rate. It is calculated by taking a weighted average of the different outstanding student loans, including the interest rates as well as the balance amount outstanding for each one. A rate is likely to be rounded off to 0.125% approximately, with the maximum rate interest cap being 8.25%.

The person is just required to make single monthly payments, rather than two or more under this new consolidation plan. Instead of multiple schedules, the loan is to have just a single repayment schedule, which is 15/20 years, etc.

Should I consolidate student loans: Some steps to follow

  • Evaluating the situation: It is necessary to calculate the amount of loan that exists currently when clubbed together and the individual interest rates.
  • Are the existing loans private or federal: Consolidation is possible under federal loan consolidation program like PLUS loans, Stafford Loans, Federal Perkins Loans, Direct Loans, FFELP and HEAL Loans. If existing loans are private, then consider private loan consolidation.
  • Identify ideal repayment period: While choosing new loan term, there is available flexibility with regards to the repayment period than before. One can select to about thirty year repayment period, thus bringing down the payments.
  • Affordable monthly payments: It is necessary to determine the monthly expenses and determine the optimum amount to be paid towards monthly loan payments.
  • Apply: Apply for the student loan. One can find useful information at to know about federal and private consolidation programs.

Following the above steps for consolidating student loans is sure to simplify the student’s life.