Minimizing the Burden of Student Loans

Consolidation Combining all of your different loans into one large loan Pros One simple monthly bill Ability to stretch into a 15,20, or even 30 year loan Cons A longer repayment period will usually end up costing more in total payments You may lose certain benefits Interest Rates, Loan Forgiveness

Changing Your Repayment Term Think About Changing Your Term of Your Loans Default Student Loans – 10 years to pay back Option to take 20 or 30 years to repay Reduces stress of student loan payment on younger workers

An Example Sarah has the following loans: $27,000 Stafford Loan at 3.6% $40,000 PLUS loan at 6.31% Sarah is currently paying back her loans in a 10 year period Sarah has the opportunity to consolidate her loans into a single loan at 4% through the federal government. Sarah is having trouble making her monthly budget work, and is thinking about going to a 20 year loan. Use monthly payment formulas to figure the following: Sarah's current 10 year monthly payment on each loan Sarah’s projected monthly payment if she consolidates to the 20 year loan Sarah’s total loans paid in each scenario