Unfortunately, not all refinancing products are available for federal loans. For example, RBS Citizens offers fixed-rate consolidation loans starting at 5.24%, but only http://www.obamastudentloanforgiveness.net for private, not federal, student loans. Social Finance, a company that refinances loans through private investors, may be an option for those with federal loans they want to consolidate into one private loan. As the Consumer Finance Protection Bureau points out, refinancing may change your tax status, too. You’ll need to check with the lender to see if the new loan will allow you to take the student loan interest tax deduction, if you had previously been doing so. Just the beginning Though choices are still limited, chances are excellent that other lenders will also begin offering student loan refinance programs.
Sure, they give us opportunity that we would not be able to seize without them, but they also place us in a financial hole that can entirely unhinge our plans for our lives after graduation. When I graduate, I will begin to pay off my loans six months after graduation. This is not a large time frame to get myself grounded enough to begin to pay back $20,000 to the government. This amount can debunk my plans for my future, forcing me to make financial decisions in order to compensate for my loan payments. According to the TIME.com article mentioned above, more student loans have been taken out in recent years, and payment delinquency is on the rise.
But borrowing thousands in low-rate student loanswhich cover tuition, textbooks and a vague category known as living expenses, a figure determined by each individual schoolalso can be easier than getting a bank loan. The government performs no credit checks for most student loans. College officials and federal watchdogs can’t say exactly how much of the U.S.’s swelling $1.1 trillion in student-loan debt has gone to living expenses. But data and government reports indicate the phenomenon is real. The Education Department’s inspector general warned last month that the rise of online education has led more students to borrow excessively for personal expenses.
It controls what I do every day and what I spend my money on. Student debt doesnt just weigh heavily on graduates. Evidence is growing that student loans may be dragging down the overall economy, not just individuals. Think about it this way: if students have significant debt, it means theyre less likely to spend money on other goods and services, and it also means theyre less likely to take out a mortgage on a house. Consumer purchasing is the primary driver of the U.S. economy, and mortgages and auto loans play a huge role as well. There arent any comprehensive, hard numbers yet on how much of a drag student debt may be on the economy, but the associations definitely suggest that growing student debt is a drag on consumption, says van der Klaauw.