The Advantages of Federal Student Loan Consolidation

If you've been wondering lately "What is loan consolidation?" then you are in luck, because education loans are about to get a whole lot easier to pay off.

President Obama student loan proposals are now impacting college debt consolidation and federal loan repayment for millions of college graduates.

However, while the advantages of federal student loan consolidation are plentiful, so are the pitfalls. It is important for federal student aid borrowers to understand the risks and rewards when they need to consolidate their educational loan.

Advantage #1 - You will save time and money. No fees, simple paperwork process. No refinancing decisions based on your credit rating. The new program is reportedly available only from Jan. 2012 through June 2012 will also be offering a slight deduction for selecting the automatic debit option in repaying your loan. This not only helps you make timely payments, but it also helps reduce the amount of interest you'll be charged over the life of your federal direct loan.

Advantage #2 - You may improve your credit score by avoiding default. Consolidating education loan debt could be the ticket to staying current and not defaulting on your financial obligations. These types of loans cannot currently be discharged for dismissed (except for loan forgiveness programs); not bankruptcy, not by hope and prayer. Not by ignoring the threatening collection agent letters. These loans must be repaid! So by consolidating, getting a smaller monthly loan payment, and sticking to a repayment schedule consistently, over time you will pay off your debt. Federal student loan consolidation then gives you a path to resolving your financial problems related to college debt.

Advantage #3 - You will avoid frustration by only having one bill to pay each month. Having to keep track of 2 or 3 different bills each and every month can seem daunting; so, by consolidating into a new federal loan consolidation program, you will not only lower your monthly bills. You'll also lower the number of checks you will have to write and mail each month!

College was worth the price of admission. Your college degree opens many new doors to career advancement now and in the future. But now, repayment of those college loans looms large. And the new federal student loan consolidation program available for only six months by the U.S. Department of Education (Jan. 2012 - June 2012), could be the winning ticket to taking advantage of direct loan consolidation.

There are also disadvantages lurking around the edges of the new federal and private student loan consolidation programs: Some consolidation programs make you ineligible to get your loans forgiven if you later enter a qualifying career. Some federal loan consolidation programs exempt certain types of loans, and loans that were taken out at an earlier time period. Oftentimes, old loans carry a lower interest rate, so consolidating those at a higher level of interest makes no sense. Remember to compare options; your student loan consolidation rates should at the very least be better than you can get from a private federal loan consolidation program.

But the U.S. Government's Dept. of Education website now offers a variety of loan calculators aimed at helping college graduates have access to online tools aiming to help them compare loan consolidation packages and help them determine the best way for them to pay off college expenses.

The official ed.gov website is undergoing a number of updates after President Obama's student loan forgiveness plans came to light in the media. By providing comprehensive details on various ways to finance a college education, this website will ultimately offer yet another advantage to those seeking federal student loan consolidation.

While paying off these loans may never be easy, making the sacrifice and the commitment now to honor your loan commitments will pay off in other ways: You will earn the satisfaction of having followed through with one of your major financial commitments you made early in your adult life. And, you will demonstrate to yourself and to future creditors that you are an excellent credit risk.

Therefore, the advantages of federal student loan consolidation are obviously a goal you'll want to consider as you dig yourself out of debt.

Steve Johnson is a writer and publisher of FindHow2.com, offering hundreds of free helpful articles on restoring good credit, debt reduction tips, and personal financial management. One of the most popular topics at FindHow2.com includes free listings of student loan forgiveness programs to pay off college debts.

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Foregoing College Today Is Practically Practical

Young Americans are taught from elementary school on up that going to college is the right thing to do. But the decision of whether or not to apply for college should hinge upon one simple question - is it worth it?

If someone else - parents, a scholarship association - is footing the bill, then the answer is absolutely yes. If the only way to pay the tuition is by taking out a student loan, the answer is no.

Too many Americans are up to their eyeballs in debt they racked up while attending college. That's a terrible way to start out life as an adult. Plenty of debt-free college graduates are struggling to start their careers in this economy, and those who owe thousands of dollars are even worse for the wear.

College isn't for everybody, either.

"While almost 70 percent of high school graduates in the United States enroll in college within two years of graduating, only about 57 percent of students who enroll in a bachelor's degree program graduate within six years, and fewer than 25 percent of students who begin at a community college graduate with an associate's degree within three years," reported Tamar Lewin in The New York Times.

Students who take out loans but don't graduate are in especially perilous waters. Dropouts are less likely than graduates to get jobs, but just as responsible for climbing out of debt.

Earning a degree right now simply doesn't guarantee the return on the investment. People can talk all they want about hard work and ambition to succeed, but those are not aspects you need college to have. If an ambitious, but uneducated, person skips college and is willing to work at an hourly wage doing the same job for which a college grad is demanding a hefty salary, why wouldn't a manager go with the less expensive option? Especially since people learn on the job, no matter the field they enter.

That doesn't mean going to college is an inherently bad idea for young adults, but it does mean young adults who can't afford tuition should hold off for a while. Use their ambition and drive to start at the bottom rung and work their way up from within then return to school when they can afford it, and possibly even convince their employer to cover part of the cost.

There are certain elements of the college experience that can't be experienced outside the classroom, but earning a degree isn't the only way to become educated. The most powerful education resource in the world is the Internet, and almost anyone can access it from almost anywhere. There are many thousands of academic outlets, publications and tools available at no cost, including college-level courses. There are even resources to help young adults start their own businesses - something many Americans pay thousands of dollars to learn about at universities.

Instead of acquiring debt right after high school, do quite the opposite - make money. Setting up a separate savings account and putting a portion of each paycheck in to pay for college down the road is the way to go. It might take a few years, but that's for the best.

Working is the best way to get real-world experience, and one has to learn personal responsibility to maintain employment. Typically, 18-year-old freshmen are more concerned with partying than learning. A student who works to pay tuition, however, is far more likely to take the academic process seriously. And having a little life experience lends to a more mature understanding of subject matter. Those who wait until they're 24 years old to attend college are eligible for Pell Grants, which cover a significant part of tuition and don't have to be repaid.

Mark Baldwin is a freelance journalist, blogger and contributing writer to many websites, including http://www.capitalonlinerevenuehoax.com/ His areas of interest include technology, media and Internet culture.

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How to Have Your Student Loans Forgiven

In a few instances, you're able to get rid of some or all your school loan debt through a loan forgiveness program. Depending on your degree with your current occupation, you could be able to get one of several programs. In case you are thinking whether it's possible to have your debt through your job, ask someone in your human resources department. The following are techniques for finding your student loans forgiven.

Volunteer

Some volunteer companies offer loan forgiveness in return for a specific amount of your energy and time. If you happen to volunteer for AmeriCorps, Peace Corps, or Volunteers in Service to America (VISTA) you can get nearly 70% of your loans forgiven. Visit their websites to learn more information regarding available programs.

Become a Full-Time Teacher

If you have a Perkins loan, you might have some of it forgiven by working full-time in an basic, middle, or junior high school that assists young people from low-income households. The more years you teach, the more you can have forgiven. A local school board should have additional information about which schools within your area offer loan forgiveness under the National Defense Education Act.

Other states have additional programs where you can apply for as well as additional scenarios. You could call your loan board of education for information about your situation

Join the Military

One of the benefits of joining the armed forces is loan repayment. At present, the Army, Army National Guard, Air Force, Air Force National Guard, and the Navy offer repayment programs up to $20,000 dependent upon the branch. Unfortunately, the Marine Corps, Coast Guard, and Air Force Reserves do not offer such opportunities.

Become a Doctor or Lawyer

Health and legal professionals can receive six-figure loan debt relief. Fortunately for these Ph.D holders, there are various loan forgiveness programs that can reduce their financial stress.

The National Institutes of Health forgives some financial debt for health care students who complete some types of medical research including clinical, medical disparities, and birth control research.
Certain physicians can get up to $50,000 of student loans forgiven through the National Health Service Corps Loan Repayment Program in return for two years of volunteer service at a clinic which has a lack of medical experts. You may be able to receive added forgiveness for additional service.
An extensive list of medical student loan forgiveness programs can be obtained at the Association of American Medical Colleges' website.

Law school graduates could have some of their loans forgiven by doing some non-profit work. Equal Justice Works has a list of law schools that have a loan repayment assistance program. If your school is listed, get hold of your financing department to find out how you can have your student loans forgiven.

In addition, you can find easy to use, helpful information about student loan forgiveness at Student Loan Forgiveness Headquarters. Student Loan Forgiveness Headquarters is a site dedicated to helping you to find the necessary options and information that could help you get rid of your student loan stress, today.

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