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These days it is pretty much assumed that if you’re graduating from college, you’re going to be graduating with debt. In fact, the average student graduates with about $21,000 in federal and private loans. With debt like that, even if you get a job right out of college, making your monthly payments is going to be TOUGH. Thankfully, there are some programs that can provide some relief. College loan consolidation is certainly a viable option, but it’s not the only program out there. Here are five choices you may make:

1. Rather than federal student loan consolidation if your income is low enough, you can apply for an economic hardship deferment or forbearance, which would temporarily suspend or reduce your monthly payments until you get your first job. Just remember that the interest will continue to grow on loans that are not federally subsidized.
2. If you think your money problems will be more long-term, than perhaps college loan consolidation is right for you. Student loan consolidation programs could drastically lower your payments, but will increase the life of your loan up to 30 years. Remember that stretching out your payments will increase the total amount you repay over the life of the loan and your total interest paid could nearly double.
3. If you have federal loans through the Direct Loan program, you may qualify for an income contingent repayment plan where your payments are based on your income and your debt load. However, the terms on such a program require payments for up to 25 years. After that time, the remaining debt will be forgiven. And if you work in the public sector — for example if you’re a teacher or a public defender — your student loan debt is forgiven after 10 years if you’re on one of these plans.
4. Private loans — which now account for one in every four dollars of borrowed student funding — have fewer options, however, and private student loan consolidation may in fact be your best bet. However, if you’d rather not go the college loan consolidation route but you’re having trouble making payments, let your lender know. It’s possible you can get your bill lowered temporarily or have your payments suspended for a while.
5. Your private student loan consolidation rates are based on your FICO credit score. So, if your credit score is higher now than when you originally got your loan, you could save a lot of money.

If you’re still in college:

Plan ahead, plan ahead, plan ahead! Do as much as you can while still in school to make the burden of debt after graduation a little more bearable. For instance, try appealing to your college to give you more financial aid. And review your FAFSA forms throughly at the beginning of each semester; If you think it is inaccurate because of a recent and unusual circumstance — like a job loss or disability — ask the financial aid office for a professional judgment review.

In Conclusion:

College Loan Consolidation can be a great alternative if your monthly payments are difficult to make (I know, I consolidated my loans) but the consolidation of student loans is not the only option. There are many pros & cons to consolidation and their consideration should be taken vary seriously. Whichever route you chose, however, there is one fact that remains true: if you can’t keep up with your student loan payments, take action. There are very severe penalties for defaulting on a student loan.

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