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Consolidating federal student loans good idea

consolidating federal student loans good idea-71

That's where debt consolidation and other financial options come in.

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You should try to get as much of this free money as you can, but it probably won’t be enough to cover all your costs.You’ll likely have to take out student loans to cover the rest.Read on to find out what student loans are about, how they work and how you should handle them.If you need help getting out of debt, you are not alone.Although signs show an upturn in the economy, many Americans are deep in debt, and not everyone can work overtime or a second job to pay down that debt.Getting rid of your student loan debt also gives you a lot of freedom — the freedom to take a lower-paying job that you care about more, the freedom to travel, even the freedom to take on other “good” debts — like a mortgage for your first house.

It’s also important to note that defaulting on your student loan can have serious consequences; in fact, not repaying student loan debt can be worse than not repaying other types of debt.

And if you have federal loans, the government can add fees or even garnish your wages, forcing your employer to withhold money from your paycheck and send it directly to the government.

There are times when it smarter to pay off other loans before student loans — if you have other debt with a higher interest rate, pay that down first, and it’s a very good idea to build an emergency fund of at least $1,000 as you start paying down student loan debt.

Public Service Loan Forgiveness benefits are available to anyone who works full time in one of the following positions: PSLF is especially valuable to people who took out massive student loans to go to school (like Doctors, Dentists, and Lawyers), but who graduate into jobs that aren’t paying them much each month, like for those healthcare personnel that choose to work in the public sector.

It’s recognized as a loophole, but by enrolling in one of the Income-Based Repayment Plans (like the Pay As You Earn Plan), and PSLF at the same time, it’s possible to have hundreds of thousands of dollars of student loans written off after making very small payments for 10 years.

If you have questions about Federal student loan forgiveness benefits, please feel free to ask them in the Comments section below.