Student debt is one of the most difficult to get out of. That is probably why it ranks as the top 2 highest debt in the USA. Despite the lowering credit card debt, the statistics of students loans do not share the improvement.
This is one of the debts that can take forever to pay off. In fact, some of the baby boomers who are about to retire are expecting to carry their student loan payments into retirement. I doubt if you want the same for yourself – worrying about your debt payments during the phase when you are supposed to be relaxing. So what you want to do is to deal with your student debt now. Don’t prolong it because soon, you will find retirement creeping up around the corner and you have run of time to fix your financial difficulties.
Also, the interest rate of student debt is high enough to cripple graduates and keep them from investing their income to grow their personal wealth. Your children will be in debt even before they start earning their keep so you have to educate them on their options before putting them through this.
The thing about student debt is it can only be solved through a handful of methods. Only recently did the federal government take action to help solve it. One of the options for student debt relief is to have your debts bought by the Department of Education. In turn, you will resume paying your debts to them but this time, with a fixed interest rate. That should make things easier. It may not be enough but the consolidation will help make payments easier to manage.
In as far as it can help, there is more to debt consolidation in terms of debt assistance. Even if you only have a few choices when it comes to student loans, there is still something that you can do to indirectly make things easier. Debt consolidation can work on your other debt obligations and that can help you free up some funds for your student loans.
Debt consolidation allows you to adapt a new payment system that has a lower monthly payment than your current. By using this method in your mortgage, credit card debt, medical bills, utility bills and other personal loans, you are freeing up funds that could be contributed to your student debt. The thing about debt consolidation is it lengthens your payment term so you can keep contributions low.
You can also use some of the freed up funds to save and grow your reserve fund. This will be your financial security net so that when something happens to your income, you don’t have to default on your payments. It can also help you finance any emergency situation that could crop up like car or home repairs and medical treatments.
While the federal government is working to solve the growing student debt, you need to know that there are ready options available for you. It pays to know before you completely give up on your student loans and dire financial conditions.