Student Loan Forgiveness and Student Loan Consolidation, Solutions for Students Loans

Los Angeles, California.: Abacus Chinese Translation Services has been hit by the recent financial crisis, as many companies went under.  However, students seem to have been hit harder, with the prospects of finding a job becoming dimmer and dimmer while student tuition costs hiked in many states.

For the students who have student loans, there choices are simple.  Pay it off, ask for student loan forgiveness, pay it off through student loan consolidation, or file personal bankruptcy.

Several schools have started student loan forgiveness programs.  The Georgetown Law Center recently announced that it will be starting a loan forgiveness program for graduates who go into the public sector. Now any Georgetown Law alum who does 10 years of work in the public sector in a legal capacity and earns less than $75,000 a year will not have to repay their law school loans. University of Minnesota in St. Paul uses state funds to offer loan forgiveness to veterinary students if they choose to enter food animal practice in rural areas.

Above are just two of the examples for the millions of hopeful students.  As there are not many student loan forgiveness programs around, many students still have to seek other means to resolve their debts.

One of the ways is student loan consolidation.  In the US, both the Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDLP) include consolidation loans that allow students to consolidate Stafford Loans, PLUS Loans, and Federal Perkins Loans into one single debt. This results in reduced monthly repayments and a longer term for the loan. Unlike the other loans, consolidation loans have a fixed interest rate for the life of the loan.

Consolidation loans have longer terms than other loans. Debtors can choose terms of 10–30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans. The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%. Some features of the original consolidated loans, such as post graduation grace periods and special forgiveness circumstances, are not carried over into the consolidation loan, and consolidation loans are not universally suitable for all debtors.

So, which student loan consolidation lender should a student choose? We shall provide further information in our next serious of our news analysis article "Student Loan Forgiveness and Student Loan Consolidation, Solutions for Students Loans"

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