Understanding student loan consolidation can be the difference between financial security with strong credit scores, and falling into loan default and the whole mess of financial difficulties that come with it. To avoid student loan default, you need to understand how student loans work, what defaulted student loans can do to your financial situation, and how student loan consolidation can help. Here are the basic facts that are most important to your understanding these issues, and how to go about acting on this knowledge.

About Student Loans

So, what exactly qualifies as a student loan? Just because you came to owe money while you were a student doesn’t mean it qualifies as a student loan. For example, credit card debt from college doesn’t qualify. An official student loan is different from other debt because it is given only to students (or parents supporting students), usually has a lower interest rate than other loans, and does not require payment (but does accrue interest) while the student is still in school.

Student loans come from different sources: some from the federal government, and some from private sources. Having multiple student loans from the same or different lenders is what makes student loan consolidation necessary.

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A good thing about student loans is that they are easy to obtain: the government makes it easy to borrow for education purpose and lenders too recognize the benefits of dealing in this huge market. We know that university education is essential for success in life.

But university education is also expensive and today students have to borrow from multiple sources and avail all types of student loans: both secured and unsecured. Sometimes the debts increase and are difficult to repay in time.
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Lawmakers target credit-card issuers that appeal to college students with gifts and prizes, but universities’ lucrative affinity deals evade regulation Citibank (C) pitched an offer at Ohio State University that few college students would refuse: free food.

A company hired by the bank plastered the Columbus campus with advertisements for free sandwiches at a local haunt, Potbelly, and free burritos from La Bamba restaurant. The only catch? Students had to submit a credit-card application before any free food crossed the counter.

The food-for-credit application scheme caught the attention of Ohio’s attorney general, Marc Dann, who sued Citibank on Sept. 19, alleging that the campus advertisements violated the state’s consumer-protection laws. Dann has partnered with students and professors at Ohio State’s Moritz College of Law to prosecute the suit, which accuses Citibank of using bait-and-switch advertising, failing to clearly state conditions of the offer, and tempting students with a prize without disclosing all the conditions. The suit seeks more accountability in credit-card marketing practices. “Citibank is starting out the marketing deceptively and banking on the fact that these kids won’t read the fine print,” Dann says. (read more…)

The cost of university education continues to outpace the consumer inflation rate, putting an even greater burden upon the shoulders of financially squeezed families. With annual education costs exceeding $30,000 or more at some universities, the financial burden is particularly profound even when some sort of assistance is made available. Online education costs are on the rise as well.

Government student loans have long been an important way to help students complete their education with private student loans now gaining in importance too. Let’s take a look at the advantages and disadvantages of funding higher education through private student loans.

When it comes to college financing, often the sticker price is one thing, but the actual cost of education is something different. Depending on the aid offered, students can expect to receive anywhere from a full scholarship to not being offered any financial assistance. In most cases, the cost of education lies somewhere in the middle once family income, assets, and other factors have been taken into account.

The amount remaining after financial aid has been factored in is what must be paid to the school, an amount that can vary each academic year. This gap is what often prompts families to consider financing options, with government-backed student loans being one option and private student loans another one.

Private student loans have several advantages to them including:

* Quick approval process: (read more…)

Like debt consolidation of all loans you too can go for student loan debt consolidation of your federal student loans. Though there are no deadlines in federal loan consolidation programs, there are certain things to keep in mind: • Your loans have to be fully disbursed to be eligible for Federal Consolidation Loan program. • You are no longer enrolled in school.

• You are actively repaying your loan (including deferment or forbearance), or are in your six-month post-graduate grace period.

• Your minimum consolidated loan amount is $10,000.

The best time to go for student loan debt consolidation of your federal student loans is when you still are in your grace period, because of the in-school lower rate of interest.

Every student has his or her reasons for going in for student loan debt consolidation, and so would you. Look at some of the reasons why you should go for student loan debt consolidation of your federal student loans: (read more…)

Consolidating loans has become the most common way in which students are solving their educational indebtedness today. Student loan consolidations have become so common, in fact, that students do not pause to think what they are actually setting out to do. Let us objectively discuss what student loan consolidation is, and see in what manner it benefits students.

A student may have taken several federal and private loans in order to complete different courses in his/her educational life. When the student graduates, paying these loans back becomes a very tedious and burdensome process. This is when the student contemplates consolidating the loans. Consolidation is the process of blending all the loans into a single loan, with a single rate of interest. The rate of interest on a consolidated loan is generally lower than the rates of interest of all the original loans. After consolidating, the student will have to pay only one loan back, with just only payment to make every month. The biggest advantage is, that monthly payment would be significantly lesser than all the earlier payments combined. (read more…)