Student Loan Consolidation Programs: Clearing Debt Made Easy

Both students and graduates face not just the pressures of getting good grades in college, but also the task of clearing the considerable amount of debt accrued while in college. With the average graduate leaving school with debts of $30,000, this can be a major task. But student loan consolidation programs make the task a lot easier, by making the debt a lot more affordable.These programs exist because the income levels of students do not match the repayment needs of these loans. Usually, more than one loan has been taken out by a student, effectively tripling or quadrupling the repayments, the interest charges and the pressure. Properly managing college debts means consolidating these individual debts into one affordable debt.Refinancing student loans is proven to be the most effective route towards financial freedom, but there are factors to consider and compromises to make. Nevertheless, the rewards are hard to ignore.The Advantages of ConsolidationIt is important to voided taking on a student loan consolidation program that proves to be counter-productive, and if the right kind of program is adopted then the chances are that the full range of advantages will be enjoyed. These advantages are substantial when the overall pressures are considered.Basically, the whole issue of repaying the loans becomes a complicated one when several loans at varying interest rates and repayment schedules are considered. If 4 loans have been taken out, then 4 different rates of interest exist, so that the total amount of interest paid each month is very high. Managing college debt means reducing this expense.If these student loans are bought out with one consolidation loan, then one interest rate exists as well as one principal sum to repay. So, a combined debt of $75,000 may require repayments of around $450, compared to $800 from the individual loans each month.Consolidating Public LoansOf course, the right student loan consolidation program depends on the type of loans that were taken out in the first place. Private loans are easily covered by consolidation loans from traditional lenders, and indeed online lenders. But when it comes to public or federal loans, there are two options available: a Direct Loan or an FFEL Loan.A Direct Loan comes directly from the US Department of Education, or federal government, and repayments are made directly to them. This is the most straightforward structure, and makes for easy budgeting on the part of the student. Understandably, managing college debts is made very simple with this option.In comparison, FFEL Loans are not directly provided by the DOE but are instead only subsidized. This means that the consolidation deal covering the student loans is provided by private lenders, so repayments are made to them. However, the interest rates are still low because of the association with the government.Applying for ConsolidationThe student loan consolidation programs available have conditions and terms that are strictly adhered to. This is because they are designed to help only those who are in real need and not just anyone.For example, there are only three occasions when it is possible to apply for an FFEL loan: immediately after graduation; when repayments have begun and the pressures proves too much; and after a deferment has been received.Wisely managing college debt might also include extending the term of the loan, thus lowering the monthly repayments. The maximum term is 30 years, making practically any student loan debt repayable. Of course, this is the desired result, ensuring the students can repay and that the lenders get their money back.