I got the following advice from a CNNMoney article:
- If you refinance or consolidate a federal student loan, you run the risk of losing many of the advantages that federal loans have over other types of student loans. In particular, deferment or loan forgiveness provisions are often available only for certain federal loans, and privately refinanced debt won’t give you those same options.
- One big draw of consolidation or refinancing is the chance to lower monthly payments. But many lenders do so not by cutting rates but rather by extending repayment periods. In other words, lower payments come at the price of having outstanding debt for years longer than you’d originally planned.“
According to an article titled “Want to Refinance Your Student Loans? The CFPB Wants to Help ” the inability of students to pay student loans is hurting the American economy. I wish I could say that is a shocker. I am glad that at least special attention is being paid to this issue. One way to reduce the amount of student loans default is by lowering the operating cost of colleges and educating students from a very young age about finance. What do you think?