When student borrowers graduate, they are often faced with many debts including student loans. These student borrowers still have to pay off student loans even though their earnings are very low right after graduation. And when you try to find out about student loan interest rates too, it makes the confusion only worse!
However, student loans interest rates matter a lot. Even if the student borrowers do not have to pay off student loans immediately after graduation, student loan interests accumulate and will need to be paid back one day! And with the high student loan interests rate and low earning power of student borrowers, it might even take student borrowers decades to pay off student loans.
So, student loans interest rates matter a lot for student borrowers and they should care about student loan interests rates as much as possible! But you would think student loan interest rates is very hard to find information about right? Not this article. We will go over student loans interest rates and explain why student borrowers really need to know these student loans interest rates.
Before student borrowers start worrying about student loans interest rates and student loan repayment, student borrowers need to make sure they know the basics of student loans. There are two types of student loans: federal student loans and private student loans. Federal student loans generally carry lower interest rates than private student loans since the government subsidizes these student loans. And student borrowers either need to pay student loans immediately after graduation or student borrowers can postpone student loan repayment until six months after graduation.
Student borrowers with federal student loans also have the option of student loan consolidation and student loan refinancing. Student loans consolidation simply means putting all student loans into one consolidated student loan while student loan refinancing is student borrowers trying to get a student loan with lower student loans interest rates. However, student borrowers also need student loan co-signers for student loans consolidation and student loan refinancing.
If rates are moving up, should borrowers consider installment loans, borrowing from a credit card or convincing their parents to refinance their mortgage?
“If student borrowers cannot consolidate student loans or refinance student loans, student loan interest rates do not matter much for student borrowers with federal student loans!”
For student borrowers with private student loans, however, they need to pay off student loans as soon as possible since student loan interests rate are higher than student loan interests on federal student loans.
“So student loan interest rates do matter a lot for student borrowers with private student loans!”
And student borrowers need to be aware of student loan forgiveness programs. Some professions like teaching or public service can help student borrowers qualify for student loan forgiveness. And student borrowers who work in the nonprofit sector might also qualify for Public Service Loan Forgiveness (PSLF). PSLF student loan forgiveness program will forgive student borrowers’ student loans after student borrowers work for 10 years in the nonprofit sector.