The Benefits of Student Loan Consolidation

Written by adminJanuary 4, 2017
Student Loan Consolidation

Student loan debt is a big worry for many people like yourself. While college is a great tool, it is expensive and loans eventually must be repaid. Looming debt can keep you from purchasing a home, starting a family or following your dreams. However, there are options to help alleviate the stress that these loans cause while still allowing you to work towards the ultimate goal of paying the balance off entirely. Discover the benefits of student loan consolidation, and find out if it could be the right solution for you.

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Simplify Your Payments

If you attended school for more than a semester or two, it is likely that you wound up working with more than one lender to pay for all of your classes. While it was likely a necessary evil to make sure your education was paid for, it has left you with numerous bills each month. Student loan consolidation means that you will have only one payment to one lender-reducing the payment hassle.

May Lower Your Monthly Payment

In many cases, a consolidated student loan can reduce the total amount that you will be responsible for each month. With everything else you need to do, and want to do, lowering this payment is an excellent way to free up money in your budget.

Repayment Based on Income

Borrowers who choose student debt consolidation have multiple plans for repayment available to them. These plans include repayment options based on income. If you initially obtained a loan before attending school, you had no idea what to expect regarding your future (post-school) income. Now, you know what you are earning. Your consolidated loan will better fit your budget.

No Minimum or Maximum

When you look at some lending options, you may find that maximums or minimums prevent you from taking advantage. Since this is a debt consolidation or restructuring, rather than a new loan, there is no maximum or minimum to worry about in this case.

Many People Qualify

Qualifying for student loan consolidation is easier than you may think. Borrowers must have one or more “Direct Loan” or Federal Family Education Loan”. This loan must be in the grace period or repayment status. Additionally, borrowers can consolidate most defaulted federal student loans.

The Options are Endless

Consolidating your loan can keep you out of default, make payment simpler and help keep your monthly payments at a reasonable level. But it’s important to realize that your options are endless. In many cases, you will be able to change your repayment plan at a later date if your economic situation changes or if you wind up with another loan that qualifies for consolidation.

As you can see, there are many benefits to student loan consolidation and more options than ever for doing so. If you are struggling with your loans and wonder if there is a better way, perhaps consolidation is the answer. Spend some time researching the consolidation options and reach out to an expert to learn more.

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4 Interesting Facts About The Public Service Loan Forgiveness Program

Written by adminJanuary 4, 2017
Student Loan Consolidation

[dropcap]Y[/dropcap]ou can receive up to 100 percent student loan forgiveness if you use your degree to obtain a career in public service. You must work for qualified employers for at least 10 years while making 120 timely payments in accordance with the selected repayment plan. Upon fulfilling the program requirements, your remaining loan balance is forgiven. Since the IRS does not view the forgiven balance as income, you will not even need to claim that amount on your taxes. Before you sign up for the Public Service Loan Forgiveness, or PSLF, program, here are four important facts you need to know.

Consolidated Loans Qualify

All loans received under the William D. Ford Federal Direct Loan program qualify for the forgiveness plan. If you have additional loans under the Federal Family Education Loan or Federal Perkins Loan programs, you can consolidate to wrap them into the qualifying loan amount. You must complete the loan consolidation process early, and in full, to avoid making additional unnecessary payments. Once you consolidate your loans, the counter for the 120 qualifying payments resets. Therefore, it is of vital importance that you consolidate your loans immediately upon reaching the end of your grace period.

Employment Restrictions Exist

To qualify for the PSLF program, you must work in a career dedicated to serving the public. Throughout the repayment period, you must maintain full time employment or work at least 30 hours a week across multiple part time positions. Certain careers also require employment with an organization dedicated to improving the lives of low income individuals. Teachers, librarians, childcare workers, speech pathologists and attorneys, for example, only qualify if their position serves low income communities. Police officers, firefighters and medical providers, on the other hand, do not have any additional employment restrictions.
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Timely Monthly Payments Required

You can select the 10-year Standard Repayment Plan or apply for one of the income driven options to start working toward 120 qualifying payments. You must make the payments in full and on time to ensure they meet the strict program requirements. You can schedule automatic withdrawals through your bank to ensure your monthly payment arrives on time. If you run into financial difficulties and cannot make your payments, you can place your loans in forbearance or deferment and resume the repayment plan at a later date.

Periodic Form Submission Needed

If you are not sure if you have fulfilled the program requirements, you can submit an Employment Certification for Public Service Loan Forgiveness form. You should also submit this form whenever you start a new job to make sure your employer meets the program restrictions. Once you reach the 120 qualified payment mark, your loan balance is not instantly forgiven. Instead, you must fill out the PSLF application forms and send them to your loan servicer for processing. You will receive a loan forgiveness confirmation upon completion of the verification process.

Preparing Your Loans For The Forgiveness Program

To ensure your student loans are fully prepared for the forgiveness program, talk to a consolidation expert about your unique financial situation. Your loan consolidation professional will find and combine all of your loans to create a single entity that qualifies for participation in the Public Service Loan Forgiveness program. You may also want to receive help selecting an appropriate repayment program for your financial situation. Enlisting a professional in these endeavors ensures you do not leave loans out of the consolidation group, select the wrong repayment program or miss any application steps.

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