Consolidate Student Loans - How To Do It Better

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Consolidate student loans is what we hear often and no wonder. Approximately 50% of college graduates have student loans and Iowa is claiming to be number one! (In Average Student Debt Levels) They are backing this figure up from the third annual report that was just released by the Project on Student Debt. This revealed that Iowa’s class of 2007 is the most indebted in the country with each graduate leaving school being $26,208 in debt.


The average cost of college increases at twice the rate of inflation. So many are forced to use the credit cards for the basic necessities. Now with the credit crunch, all the prices have gone up including prescription drugs, milk, bread, etc. It will take discipline and creativity to pay off that amount. Before going that route to consolidate the student loans let's see some ways that may help:

  • First ask for economic deferment by requesting a financial hardship or leniency if you are not able to make monthly payments. This will help you not to lose your tax refund or prevent one from garnishing your income.
  • Sell some stuff you no longer need in a garage sale or at eBay to raise money to help pay for the student loan.
  • Rent one part of your house or get a roommate to raise money to help pay off the debt.
  • Make use of discounts and credits. You can pay the loan quicker by linking your Upromise account to your Sallie Mae account. Sometimes if you sign up for an automatic debit payment you may be able to get a rate reduction.
  • Pay more each month from the rent your roommate pays you or send an extra $10 payment.
  • Check the status of your debt. If your school closed or you become disabled, your debt may be cancelled to the point you will not have to pay for it.
  • Stay away from declaring bankruptcy for federal student loans as they are exempt from this.
  • If you must consolidate student loans, proceed with caution. Do research on the best offering like lower interest rate. Another caveat you have to keep in mind is that if you consolidate student loans, you may become ineligible for forgiveness programs, forbearance or deferment.
  • Choose a repayment plan that fits your needs, be it standard, graduated, extended, serialization, or income sensitive. This website may be of help:
  • Be on time with payment because any late payment will reflect on your credit report and this in turn will increase your rate of interest and can stay like this for over seven years.
  • See if you qualify for student loan forgiveness programs. This is if you want to work as a teacher, nurse or doctor for a non-profit agency or any government agency. This website may give more information on this:
  • Change the lifestyle in order to reduce expenses. Any money you save from this can go towards paying the student loan.

There you have a dozen ways you can work on before you consolidate student loans.

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