Boca Raton, Fl – Student loan is a compound noun dreaded by most college graduates. College Board reports that the average 2014-2015 college tuition increase was at 2.9 percent for public universities and 3.7 percent for private colleges, making it necessary for students to take out Federal or private loans. In the graduating class of 2013, the Institute for College Access and Success found that 7 in 10 seniors were starting the next chapter of their lives in debt, and figuring out how to pay off that debt can take up time that recent graduates don’t have.
Direct Student Loan Consolidation, similar to refinancing, can make paying student loans manageable by bundling many loans from different lenders into one large loan from a single lender that has a fixed interest rate. The borrower is essentially taking out a new loan to pay off the smaller ones, but will only be responsible for making payments on the consolidated loan, eliminating the need to juggle different due dates, different interest rates, and different repayment plans. Consolidation is even possible for borrowers who have defaulted.
Sounds simple, right? Not exactly. Maybe it sounds simple because of how easy it is to accumulate student loan debt in the first place. Who thinks about repaying that $20,000 loan when taking it out? In a Forbes article from 2009, a New York University senior said that the loans she took out to pay for her education “seemed like Monopoly money.” This is because many students are 18-years-old when they take out college loans, and they either misunderstand their terms or take them out blindly.
A survey of high-debt borrowers conducted by Nera Economic consulting found that 65 percent of the sample misunderstood or were surprised by aspects of their student loans, and even when they did understand the terms they stated it was difficult to see the big picture, the long-term effects this student loan debt would have on their lives. Considering that lack of knowledge and guidance often plays a part in the debt graduates find themselves in, using a third-party service to help with the loan consolidation process can prevent mistakes from happening and alleviate uncertainty.
Not only does applying for loan consolidation take time, but it comes with its own terms that need to be understood. Loan consolidation service companies explain these terms to borrowers and ensure they understand all aspects of the loan, like how the interest rate is calculated and how long repayment will take.
Before getting a consolidation loan, borrowers need to submit an application to the Department of Education and have it verified. Loan consolidation companies will handle all the paperwork so graduates or parents working full-time jobs don’t have to. A mistake on the application, leading to it being returned to the borrower to be corrected, can hold up the verification process, but a third-party service’s job is to ensure the application is filled out carefully and without errors.
Many companies will even act as a liaison between the borrower and the Department of Education, so any issues with the application will be directed to them first. They file borrower information and provide the Department of Education with status updates.
Loan consolidation helps borrowers manage their debt, but going it alone can be overwhelming. A loan consolidation service company handles the paperwork and does the research to remove some of the burden from its customers’ shoulders. That’s as easy as the process of loan consolidation gets.
Written by Trusted Debt Solutions, we have heard many of the questions and concerns of customers throughout our years in business. Our Debt Consolidation Company helps you through the process of consolidating your loans into one less costly monthly payment and making sure that all of the proper steps have been taken for the government to take your consolidation seriously. For more information or any additional questions please visit: www.trusteddebtsolutions.com
- “Student Loan Consolidation Services Review.” http://student-loan-consolidation-services-review.toptenreviews.com/
- “Average Student Loan Debt Approaches $30,000.” http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000
- The Institute for College Access and Success (TICAS): http://ticas.org/posd/home
- Federal Student Aid website: https://studentaid.ed.gov/sa/repay-loans/consolidation
- The loan consolidation process: http://loanconsolidation.ed.gov/loanholder/lconslproc.html
- “Tips on Consolidating Student Loans.” http://www.forbes.com/2009/04/15/student-loans-moneybuilder-personal-finance-consolidate.html