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However, the program is for government-backed loans only. Additionally, the Department of Education will take 0.25 percent off your interest rate for each loan you include in the consolidation. By streamlining your student loan bills down to just one, you will be able to focus on the amount you’re paying each month and determine the best way to manage your student loan and eventually get rid of it. This can be extremely helpful in cases where you are having a hard time making sense of all your debt and are unable to formulate a consistent plan for paying it off. I’m confused by too many student loan billsĭo you feel like you get 25 different envelopes related to student loan bills every month? Does it seem overwhelming? if so, you should consider the Special Direct Consolidation Loan program, which allows you to group all your government-backed student loans (including the ones serviced by private lenders) together into one loan - which means you will only have one payment.
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But again, remember that you’ll pay more in interest over the long-run, so think it through carefully. In many cases, your lender will work with you to adjust your monthly payments. What you need to do is call your lender and explain that you are having trouble making your minimum payments at the moment and that you would like to switch to an extended repayment plan. It turns out there are some ways to adjust your repayment plan even when your loans are not backed by the government. And if you aren’t able to pay off the loans after 25 years of making payments under the IBR plan, the government will forgive any remaining debt.īut what if you have private student loans? Good question. Of course, that means you will pay more interest in the long-run, but it might be worth it if you absolutely can’t afford your student loan payments right now. With IBR, you’ll also have a different timeline for repayment - 25 years instead of 10 years. Yep, you read that right! This can be a blessing for people who desperately need a little more flexibility in their monthly budget. The IBR plan adjusts your monthly payments so that you will pay no more than 15% of your current income toward your student loans. The program is called income-based repayment (IBR), and it works if you have federal student loans. Well, what if I were to tell you that there’s a program most people don’t know about that can give you some breathing room while you work to achieve greater financial stability? Many graduates are finding it difficult to make their minimum monthly student loan payments. Since the global recession, it's been difficult, especially for young people, to find good, high-paying jobs.
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It’s not a surprise that this is one of the most common problems faced by student loan borrowers. My monthly student loan payments are too high Use the National Student Loan Data System (click on “Financial Aid Review”) to look up your loans and find out exactly what type they are - and whether they are federal or private. in order to determine which kind of student loans you have, you need to do a little research.