Student loan debt is a slippery slope that many graduates know too well. Between a struggling job market leaving many without employment to high monthly payments, many college graduates find it impossible to manage their debts. Since student loan debt is rarely discharged in bankruptcy, the options become limited for those struggling to minimize their loan default. However, there are a few options that can help alleviate some of the financial pressure brought on by overwhelming student loan debt.
The overall goal of consolidating debts is to secure one, lower monthly payment that can be better managed by the debtor. Many people find it difficult to repay their debts when they are spread among several creditors, each charging their own high interest rate fees. When you consolidate student loan debts you are essentially rolling all of your separate debt accounts into a single creditor. Typically, the interest rate is lower than the separate accounts and are more flexible with their payment schedules.
Although some oppose consolidating loan debts as a strategy for managing debts, it can be beneficial in the case of student loan debt. Why? Because it is rare for someone to consolidate a student loan debt only to turn around and acquire more debt on separate accounts, which is common among credit card debt consolidation. A one-time consolidation of an inflexible debt account, like student loans, is less likely to result in more debt.