By Kayla Lucas
Are you thinking about entering in the world of higher education? Good! Have you also mapped out a plan dedicated towards financing that education? Even better! This is something that you have to consider because according to Student Loan Hero, the average 2016 graduate has $37,172 in student loan debt which is 6% more than last year’s class. If you want to try and steer away from this financial wormhole and repay your student loans more quickly, then you should keep reading about keeping your student loan costs low!
One option you have to control your student loan debt is to consolidate your federal student loans. This means combining several smaller loans into one larger loan. The U.S. Department of Education offers a Direct Consolidation loan which combines your federal loans into one new loan. The new interest rate is a weighted average of the interest rates of your old loans. The benefits of this type of loan are easy qualification, only one monthly payment, and you can qualify for Public Service Loan Forgiveness.
Determining which loans and which consolidated loans qualify can be confusing. See www.studentaid.ed.gov for more information. The disadvantages are that only federal student loans are eligible, interest rates are averaged, and income-driven repayment plans may result in more interest (finaid.org). Also, in order to qualify for student loan consolidation, however, you need to have a good credit score and a steady income (Nerd Wallet).
This second option can be a great challenge for others: increasing your income. There’s nothing worse than taking out more loans than you have to. If you’re able to pick up another job and/or get a pay raise, then you’re on your way to getting rid of more of that student loan debt. Also, cutting down on costs and expenses can help you to pay off more of your student loans. To learn more about reducing your overall student loan costs before, during or after college visit these websites: www.isac.org and www.studentaid.ed.gov/sa.
Don’t forget to complete the FAFSA early and start gathering your tax and other required documents in advance! (FAFSA opened in 2016 on October 1st.)