In an article published in December of 2011 on the financial portal 'Business Insider', some real life stories were illustrated about people who took out loans for their education.

These student debt stories give a clear picture on how borrowers struggle to lift the crushing burden of student loans off their shoulders.

All of these instances depicted various situations that the student community faces that makes them financially stressed.

A summary of a few stories on the website are:

Case 1:
A borrower took out a loan to study Game Art and Design and ended up owing $ 100,000 in debt.

Case 2:
This person's original loan amount was $ 80,000 that increased to a whopping $ 135,000!

Case 3:
A loan was taken from a leading bank in 2005, and the repayment terms could not be negotiated. Even after the borrower's repeated request to negotiate, the loan was sent to one of the banks collection agencies.

Many readers can easily identify themselves with the three instances mentioned above. These are some of the common scenarios that borrowers face due to job loss, bankruptcy, or heavy medical bills. Such instances create obstacles for people, making it difficult for them to pay back their debts and get rid of their financial liability.

Other Factors Causing Student Debt
Apart from current financial conditions, there are other factors that may cause student debt. It could be due to multiple loans along with variable interest rates that come along, capitalization of interest or interest-only payment options. They eventually accumulate to a huge amount.

There are many borrowers who have not missed their payments on their credit card debt, car loans or mortgage. They even have a good credit score. However, because of the reasons mentioned above, they are never able to pay off their student loans.

One of the best solutions that these borrowers have in getting relief from their debt is to consolidate their various loans into a single loan amount. In this way, they only need to make just one monthly payment at a revised interest rate.

How to Consolidate Student Loans
A borrower who can't afford to pay off their student debts can consolidate multiple loans through federal direct consolidation programs and regain control over their financial situation.

When consolidating loans, borrowers should not combine their federal loans with their private ones. The Department of Education does not allow consolidation of private loans.

Federal student debt relief services are an excellent way to get the maximum federal loan benefits. Consultants for student debt relief provide an apt solution, as they have the expertise to match each loan with eligible payment plans.

Some leading companies offer comprehensive assistance and guidance to borrowers for a reasonable one-time fee. In this way, they can find a hassle-free solution and get peace of mind.

Student Loan Consolidation Plans

Income Based Repayment Plan
Unlike traditional lending practices, the only factors involved with determining a borrowers monthly payment are annual adjusted gross income and family size. Credit score and loan amount are not taken into account.

Only loans available under the Federal Family Education Loan (FFEL) Program and William D. Ford Federal Direct Loan Program qualify for an Income Based Repayment Plan.

Income Contingent Repayment
This plan has been designed for those who are not eligible for the Income Based Repayment (IBR) or Pay as You Earn plans. The Direct Subsidized, Unsubsidized, Direct PLUS Loans and Direct Consolidation Loans qualify for this plan.

Standard Repayment Plan
Through this plan, student debts can be repaid in the shortest possible time. It requires a fixed monthly payment to be made for a period of up to 25 years.

Graduated Repayment Plan
Under this program, the starting monthly payments are low. The payment amount will subsequently increase by 4.25 percent (approx.) Every year.

Besides consolidation, another quick way to remove all of your student loans is to qualify for a loan forgiveness program.

Ezine by Betty Latimer

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