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Parents Feel Relief When Kids Consolidate Student Loans
When students or parents decide to consolidate student loans, it can take much of the financial burden off of the parents. The college years are costly and lengthy, but supportive parents do what they can to help their kids make it through and graduate. This often involves taking out loans to help pay for tuition, room and board, books, and other college expenses. By the time little Susie walks to Pomp and Circumstance, there can be several loans in existence, totaling tens of thousands of dollars. If these loans are left open individually, it will mean several expensive payments each month until they are all paid off. However, parents can reduce both the number of payments being made and the amount being paid if they choose to consolidate student loans.
When the loans are consolidated, the new lender pays off the original loans and opens a new single loan for one amount, one interest rate, and one payment. Consolidation can reduce the total monthly student loan payment by as much as sixty percent, freeing up some of mom’s and dad’s hard-earned money for retirement, the next college-bound child, or whatever it is that mom and dad desire. Having one loan on the books versus several also improves one’s credit score and many lenders offer flexible repayment plans. Quite often, a variety of different loans are obtained throughout the course of one’s college career. It’s quite possible to have a combination of Subsidized Federal Loans, Stafford Loans, and Parent Plus Loans.
The good news is that it doesn’t matter what type or how many different types of student loans are granted, they can all be consolidated into one loan. Even when student loans have been taken out by the student himself, parents quite often end up helping to make the payments or assist their child financially because the loan payments are a little too much for the recent grad. Consolidation is a great option here as well because it lessens the financial burden on both the parents and the kids. Not only are payments reduced, but lenders also offer flexible repayment plans, some with staggered payment amounts that steadily increase every couple of years. Deferment and forbearance are also possibilities in certain circumstances and are options that can postpone or reduce payments for a limited period of time, depending on the borrower’s qualifications. Deferment is government regulated and the lender must honor deferment status if the borrower qualifies. Forbearance is granted at the lender’s discretion and is not federally regulated. Much of the financial burden of a college education falls on the parents. When one chooses to consolidate student loans, it can relieve the parents of much of that burden. Relief can come in many forms: Lower interest rates, reduced monthly payments, higher credit scores, and flexible payment options.
Student loan consolidation can help make getting the kids educated so much more affordable in the long run.
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