Encourage Students to Seek Repayment Options
Oak View Law Group
Some of the students who are drowning in the student loan debt mire are the ones who have treated the loans as monopoly money. No loan can ever act like a grant and hence if treated as a grant, students could be trapped in an impending disaster. If you are working with students who have taken out one or more student loans and they’re not able to make the monthly payments, let them know there are debt consolidation options. Your students should consider securing debt consolidation loans from the US Department of Education that can combine multiple debts into a single monthly payment. There are a number of advantages:
Assessment of individual situation:
When students approach the US Department of Education for a direct debt consolidation loan, representatives will check each student’s current financial state so that they know the reason behind an inability to repay.
Interest rates will be revised:
Often high interest rates contribute to an inability to make minimum monthly payments. But fortunately, when you take out the direct debt consolidation loan, the interest rate can be lowered.
Extension of the repayment period:
Sometimes there are student loan debtors who aren’t looking for a reduction in the interest rates but a reduction in the monthly payments. For them, an extension of the repayment term can mean a lot. The US Department of Education can extend the term of the loan so as to make the monthly payments af- fordable for the borrower.
Flexible repayment terms:
The biggest benefit of a direct debt consolidation loan is that they allow students to repay a loan through the Income Based Repayment Plan or the Income Contingent Repayment Plan. The government even allows them to switch from one repayment plan to another according to their changing financial needs.
Boost credit score:
As you know, student loans can’t be discharged in bankruptcy. However, as soon as timely payments begin to be made, students can see their credit scores increase with time.
Take the initiative to help your students handle their education debt. Ensuring that your students graduate with the knowledge of their options is an important first step.
Andrew Jackson is a financial counselor associated with Oak View Law Group, APC for over 4 years. He analyses people’s financial situations and advises on different debt relief options. He also helps people manage their budgets through free counseling.