Student Loan Taxation and Consolidation

By: Mevish Jaffer

Graduating from college opens up a whole new, exciting world for you. It also marks the beginning of an entirely new chapter in your life, hopefully one filled with never-ending career possibilities. On the flip side, graduating from college also means repaying all those student loans you took out while trying to further your education.

Repayment of student loans also includes the addition of student loan taxation. Fortunately, student loans qualify for interest deductions on taxation. Student loan taxation deductions can be claimed if you used the money from student loans to pay for school associated costs such as tuition, fees, books, supplies, room and board, etc. The tax break that interest deductions on taxation for student loans provide, offer at least some form of relief for families who want to help their children finance college, but lack the sufficient funds.

Too Many Loans, Too Little Money

It’s highly probable that you took out more than just one student loan to get through college and that you are now juggling the task of repaying all of them back. You could be making up to 3-4 monthly payments, which is not easy when you are new to the workforce and are barely making ends-meet as it is. It may sound extreme, yet many people face the same daunting situation after graduating from college.

On the brighter side if you do find yourself struggling to make all of your monthly student loan payments, you can always opt to consolidate your loans in an effort to ease the burden. Student loan consolidation involves attaining a new loan that you can use to pay off all of your outstanding student loan debts. Additionally, the terms and conditions applied to the new loan are generally customized to meet your financial needs. This ensures that you won’t repeat defaulting on your new loan as you will be able to better afford the new monthly payment.

Advantages of Student Loan Consolidation

There are several advantages to consolidating your student loans, which all result in lessening your financial load. They include:

* Lower interest rates which save you a lot more money
* You only have to pay one lender as opposed to making payments to several different lenders
* There are many different payment plans to choose from
o Standard payment plan consisting of set monthly payments
o Graduated payment plan which starts out with low monthly payments and then gradually increases
o Variable payment plan that is adjustable with your changing income and expenses
o Extended payment plan enables you to extend the loan pay off period and decreases your monthly payments

Student Loan Consolidation Providers: Things to Watch out For

If you’re thinking about consolidating your student loans, then you probably need a student loan consolidation company to make it happen for you. However, there are some things to watch out for when choosing the right student loan consolidation lender. You have to make certain that the lender/company is credible and does not charge high upfront costs. It’s also wise to make a note of the different discounts on interest rates and conditions that various lenders are offering before making a commitment.

Paying back your student loans doesn’t have to be such a huge financial burden. You can take comfort in the fact that there are ways such as student loan taxation deductions and student loan consolidation options that serve to help ease some of the difficulties you may be facing in repaying your student loans.