It happens year after year: Students take out high student loans for high career aspirations. Unfortunately, with the economy not adding jobs as quickly as universities are pumping out students, it can be difficult to harness the income to pay back student loan debt. Since student loan debt cannot be discharged in bankruptcy, there is very little relief for young adults. However, proper money management with the help of a bankruptcy could make the process easier.
Considerations for Consolidating
One of the biggest considerations to acknowledge for consolidating student loan debt is whether your student loans are federal or private loans. Federal loans – and even a few private lender loans – can be consolidated through the Federal Direct Consolidation Loan program. The goal of this program is to allow young adults the opportunity to restructure their repayment schedules for a more feasible option.
When consolidating private loans, be sure to keep track of your FICO credit score. This is what will determine what the initial interest will be once the loans are consolidated. Unfortunately, there are no fixed rates, so it’s important to weigh your current rates and what the potential consolidated rate could be. Also remember that you don’t have to consolidate all of your student loans. You can choose which ones to consolidate and which ones to leave be.
What Can Bankruptcy Do
If you are facing extreme financial difficulty and paying back your student loan debt would create undue hardship, it may be possible to have them discharged through bankruptcy. However, this process is extremely difficult, rarely executed, and almost always requires the guidance of a Dallas bankruptcy attorney. A bankruptcy attorney can help you determine whether or not you even qualify to have your student loan debt discharged. If so, the bankruptcy attorney will gladly guide you through the process. Even if you don’t qualify, take advantage of the situation to ask the bankruptcy attorney about the terms of your loans and the options you have for consolidating your student loan debt.