With cost of college education spiraling, student loan debt has also steadily increased. Based on the report of the National Center for Education Statistics, 50% of college graduates have loans. On the average, each student has about $10,000 loan upon graduation.
Comparing the students’ loan statistics in both private and public schools, the average cost of college education for private schools is more than double than public schools at $28,000 and $13,000 respectively. With this, it is imperative that you have to carefully plan and manage student loan debt starting day 1 of application.
student loan debt
Students have two key options to repay their college education loans. The first is the student loan consolidation or opt to refinance your loan. The first option has two key advantages. You can reduce the total cost of your loan when you avail of the repayment scheme within six-months after graduation. Meaning, you can wait for the interest rates to go down within this period and apply for the student loan debt consolidation following the reduced rates.
This will also essentially reduce your total student loan debt. In addition, you will only deal with only one creditor in paying your student loan under the loan consolidation scheme. Much better than dealing with quite a number of creditors which you may not be able to manage effectively.
It will be helpful if you keep track of the updated interest rates within six months after your graduation and apply as soon as rates are at their lowest. This will substantially reduce your total loan debt because computation will be based on the updated interest rate. You can opt to add some amount over and above your regular monthly repayment so that this will also reduce your outstanding balance. Lastly, compare the rates that federal student loan debt consolidation versus private credit facilities. Government has lower interest rates compared to private loans.