5 Simple Facts about Student Debt [INFOGRAPHIC]
At $1.2 trillion, student debt has surpassed credit card debt and car loans, and is nearly eclipsing mortgage debt as the leading cause of debt in America. As a result, college students are not completing their post-secondary education and graduates are having difficulty finding jobs with adequate pay. Many graduates of for-profit institutions are also struggling to apply their skills in a way that will help them pay off their student debts. But the effect does not stop there. Parents who are cosigners on their children’s student loans are also taking a big hit to their credit, putting off retirement, and once again sharing their home with their adult children.
However, as the economy slowly recovers, and government scrutiny of for-profit institutions increases, the highly debated issue of student loans, has not yet reached “crisis status.” Through well-researched and responsible borrowing practices, students and parents alike can work towards a more educated and financially healthy future.
If you find yourself struggling with student debt, get educated, and check out our top recommended student debt reconsolidation company reviews!
- Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
- Negotiates with your creditors on your behalf.
- Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
- Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
- Combines all your debts and creditors into one monthly payment.
- Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
- You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
- Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
- Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
- Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
- Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
- Borrowers can receive funds from their loan within only a few days.
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