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College Students and Recent Grads

Guide to Free Community College in the U.S.

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Free community college in the U.S. is starting to become a reality. Since 2014, four states have signed into law “College Promise” programs aimed at delivering subsidized higher education to their residents. Numerous cities across the U.S. have also taken notice, enacting localized scholarships that cover the costs of two-year college programs.

While the past few years have proven to be monumental for the College Promise cause, this is a movement that has been long in the making:

The history of the free college movement in the United States

Where you can go to community college for free

There are currently 10 statewide free community college programs enacted across the U.S.:

The fight for free community college tuition is growing rapidly at the local level as well. There are notable free community college programs in:

  • San Francisco
  • Chicago
  • Long Beach, Calf.
  • Kalamazoo, Mich.

For this article, we’ll be focusing on New York, Oregon, Rhode Island and Tennessee due to the level of funding and reach of the state programs.

What you need to know

The free community college movement

Over the past four years, there has been a significant push to make America’s public colleges tuition-free.

The Campaign for Free College Tuition was established in 2014 as 501(c)(3) nonprofit. They are a bipartisan group that works with elected officials, leaders and policy experts to make public colleges tuition-free.

In addition, former President Barack Obama proposed the College Promise National Advisory board in 2015, which pushed for offering two years of community college tuition-free. This proposal was expanded with the America’s College Promise Act of 2015, which would award federal-state partnership grants to states who waive tuition and fees for students wanting to attend community college.

While every state program is different, they are helping students ease the burden of college debt and gain access to higher education.

Free college in New York

New York made history in April 2017, when the Excelsior Scholarship was signed into law. The program, which was originally proposed by Gov. Andrew Cuomo in January 2017, promises free tuition for in-state students attending two- or four-year colleges within the State University of New York (SUNY) and City University of New York (CUNY) campuses. This is the first college promise program in the U.S. to encompass both four-year universities and community colleges within the state.

Who qualifies

To qualify for the Excelsior Scholarship in New York, applicants must:

  • Reside in New York state for 12 months prior to application submission
  • Be a U.S. citizen or an eligible non-citizen
  • Have graduated high school within the U.S., earned a high school equivalency diploma or passed an “Ability to Benefit” test
  • Plan to attend a SUNY or CUNY campus for a two- or four-year degree
  • Complete 30 credits a year (minimum of 12 a semester)
  • Maintain good academic standing
  • Be on track to earn an associate’s degree in two years or bachelor’s degree in four years
  • Applicant’s household income must not exceed:
    • $100,000 for the 2017-2018 school year
    • $110,000 for the 2018-2019 school year
    • $125,000 for the 2019-2020 school year

What it covers

The Excelsior Scholarship is a last-dollar program, meaning students must first exhaust federal and state resources, scholarships and grants before the program kicks in. Students are awarded up to $5,500 for tuition and fees, minus any dollars received from Pell Grants, New York’s Tuition Assistance Program (TAP) or other scholarship awards.

Students who qualify for the Excelsior Scholarship will have their tuition covered at SUNY and CUNY schools via a credit, which goes directly to the institution and covers any remaining costs. It does not provide financial assistance for books, housing or transportation.

Fine print

  1. Must live and work in New York for as many years as enrolled in the program: If a student fails to do so, the award converts over to a loan.
  2. Students must apply for all applicable financial aid: This includes Pell Grants, TAP and other financial awards before applying to the program.

Free community college in Rhode Island

Gov. Gina Raimondo signed the “Rhode Island Promise” into law in January 2017. It provides recent graduates in Rhode Island a path toward higher education, no matter their family’s income level.

Who qualifies

To qualify for the Rhode Island Promise, potential applicants must:

  • Be Rhode Island resident
  • Be younger than 19 years old when you completed high school or GED program
  • Have recently graduated high school (public, private or home schooled) or recently received a GED
  • Apply to the Community College of Rhode Island
  • Enroll the following semester after high-school graduation as a full-time student
  • Fill out a FAFSA
  • Fill out the Rhode Island Promise Attestation form

What it covers

The Rhode Island Promise covers two years of tuition and fees for applicants. Students who receive the Promise are entitled to tuition and fees for two years at the Community College of Rhode Island to complete an associate’s degree.

Like New York, the Rhode Island Promise is a last-dollar scholarship. Students may also apply for other financial awards such as Pell Grants, Supplemental Education Opportunity Grants (SEOG) or individual institution scholarships. The grant covers any remaining balance.

A key distinction of the Rhode Island Promise is that there is no household income limit for applicants. So long as students adhere to the requirements above, they are eligible. Once they complete the program, students are not required to stay in the state, though they are encouraged.

Fine print

While the Rhode Island Promise is a very generous grant, there are a few things to consider.

  1. Students must take a full course load every semester: Students who are considered part-time (less than 12 credits) during the add/drop period will not receive the scholarship, nor will they be eligible for future semesters.
  2. Students must maintain a cumulative GPA of 2.5: If a GPA falls below 2.5, students have the ability to take summer classes; however the Rhode Island promise does not cover summer courses.
  3. Students must complete 30 credits in the first year to renew the scholarship: To be eligible for a second year of the scholarship, students must have 30 credits. AP classes taken in high school can count towards this.

Free community college in Tennessee

Tennessee became the first state to offer free community college to all residents in May 2014, when the Tennessee Promise was signed into law. Championed by Gov. Bill Haslam, the Tennessee Promise has paved the way for many of the other states to create similar free college programs. As of February 2017, over 33,000 students had enrolled in the program.

Who qualifies

To qualify for the Tennessee Promise, applicants must:

  • Be a Tennessee resident
  • U.S. citizen or eligible noncitizen
  • Apply for the Tennessee Promise scholarship
  • Complete a FAFSA
  • Be under the age of 19, after graduating high school or GED program
  • Have recently graduated from high school (public, private, home school) or recently received their GED
  • Enroll as a full-time student for the fall semester following graduation
  • Attend a mandatory meeting in applicant’s local area
  • Complete eight hours of community service every semester prior to the start of the semester

What it covers

The Tennessee Promise Scholarship is a last-dollar scholarship that covers tuition and fees for any of the state’s colleges of applied technology (TCATs), community colleges or in-state public four-year colleges that offer a two-year program. It does not cover the cost of books, transportation or room and board. The scholarship is applied after all other forms of financial aid have been exhausted.

While the scholarship has no household income requirements, the program does focus on attracting low income, at-risk students by working with high school guidance counselors across the state. According to the TN Achieves report, the average award for the 2016-2017 year was $1,090 per student.

A unique aspect of the Tennessee Promise Scholarship is the program’s emphasis on mentor guidance. In addition to the money eligible students receive, the state has recruited over 32,000 volunteers since the programs start in 2009. The goal of a mentor, who is given a maximum of 10 students, is to make the road to college as clear as possible for students. Training is provided to mentors, and students must meet with their mentors at two mandatory meetings held in each county before the start of fall semester.

Fine print

There are a few things to keep in mind when applying for the Tennessee Promise Scholarship:

  1. Students must attend for consecutive semesters as a full-time student: A gap in enrollment or a drop down to part-time student results in ineligibility for the program.
  2. Students must maintain a 2.0 GPA.
  3. Missing a mandatory meeting results in permanent ineligibility.
  4. Students must complete eight hours of community service every semester.

How to leverage your community college degree

Students who obtain an associate’s degree save over 60% in the cost of tuition and fees when compared with the same costs at a four-year college. The American Association of Community Colleges reported that for the 2016-2017 school year, the average cost of tuition and fees for a four-year public in-state college was $9,650, compared with community colleges that charged $3,520.

One way to minimize the cost of college is to take core classes and electives at a community college before transferring to a four-year school. This strategy allows students to take the same classes a student would be taking at a four-year college, without the price tag of a four-year college. Once completed, students can transfer to a four-year college to complete their bachelor’s degree.

Students already enrolled in a four-year school can still take advantage of these savings by taking approved electives and core classes over the summer at a community college. This strategy can help students graduate on time and save money.

Pros and cons of transferring to a four-year school

The main benefit of attending a community college prior to a four-year school is the cost savings. Depending on a student’s living situation, many can live at home and commute to community college. This eliminates room and board costs, which are an average of $10,800 for the 2017-2018 school year, according to the College Board.

Students transferring from a community college to a four-year school generally have a clear pathway, so long as they are in good academic standing; however it’s important to make sure credits will transfer. This is especially true if a student changes majors upon transferring. For example, a student who took core classes for a history major at community college but switches to a biology major at a four-year college may have to retake certain core classes.

Alternatives to community college

Community college is not the only way to learn new skills and increase your earning potential. While traditional two- and four-year college programs can open up job opportunities, it’s important to note there are other pathways to career success.

Apprenticeships

Apprenticeships offer students a way to learn a specific skill or trade without the burden of student debt, while also earning a wage. According to the U.S. Department of Labor, “87 percent of apprentices are employed after completing their programs, with an average starting wage above $50,000 per year.” The recent rise in the popularity of registered apprenticeships is thanks to a labor department initiative, ApprenticeshipUSA, which received $10.4 million in accelerator grants at the start of 2017.

While many apprenticeships apply to certain trade skills like electrical or construction work, there are apprenticeships in the health care, business, hospitality, energy industries, as well as others. The labor department lists a variety of resources for finding and learning more about apprenticeships.

Certificate programs

Certificate programs allow students to become experts in certain skills and industries without committing to a full undergraduate or graduate degree. Intensive programs can be a short as 10 to 12 weeks, while others may take up to three years to complete, depending on education level and area of interest.

Certificate programs are becoming widely popular within the IT industry due to the salary boost that comes with them. The Global Knowledge 2017 IT Skills and Salary report found that the difference between salaries of certified vs. noncertified IT employees was 11.7 percent, or $8,400 a year.

Certificate programs can be found at community colleges, graduate schools and online schools across the globe. Popular programs vary for different levels of education. For example, getting certified as a yoga or pilates instructor requires less prior education requirements than someone looking to become a certified financial planner.

Trade school

Designed to teach students skills related to a specific career, trade schools give students hands-on learning that directly applies to specific careers. One of the major benefits of attending a trade school, also known as vocational schools, are the job placement programs that come along with them. Many vocational schools have strong ties to certain industries giving students a clear pathway toward earning their first paycheck.

Popular trade school programs include automotive, plumbing, electrical and HVAC, among others, and can be found in high schools, community colleges and for-profit industry trade schools across the country.
If you’re seriously considering trade school, be sure to do your due diligence on the school. The FTC warns that some for-profit trade schools misrepresent what they can offer students. To avoid losing out on a quality education, prospective students should look for schools that are licensed by state agencies (like the Department of Education), or accredited by a legitimate organization. Other good information to find out would be: “What percentage of graduates found work after graduation?” and “What are the average starting salaries of graduates?”

Whatever higher education path you take, be sure to look into local and state-run scholarships and grant programs. Research all your options, and plan your finances ahead of time.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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College Students and Recent Grads, Pay Down My Debt

Sample Goodwill Letter to Remove a Late Student Loan Payment from Your Credit Report

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Businessman Holding Document At Desk

If you’ve pulled your credit report recently and discovered that there’s been a late payment reported on your student loans, you might be wondering what you can do to recover. Late payments can damage your credit, especially if you stop paying your loans for an extended period of time.

We’ve already gone over the repercussions of delinquency and default, but now let’s take a look at another method of repairing your credit report — sending a goodwill letter to your creditor.

What is a goodwill letter?

A “goodwill letter” is a simple way to repair your credit report, and it can be used for both federal and private loans. The purpose of a goodwill letter is to restore your credit to good standing by having a lender or servicer erase a lateness on your credit report.

Typically, those who have experienced financial hardship due to unexpected circumstances have the most success with goodwill letters. They allow you to ask if your student loan servicer can empathize with the situation that caused the lateness and erase it from your report.

It can also be used when you think the late payment is an error — for example, if you were in deferment or forbearance during the time of the late payment and weren’t required to make any payments, or if you know you’ve never been late on a payment before.

What makes a convincing goodwill letter?

If you’ve been looking for a goodwill letter that will work well, we have some tips on what you should include in your letter:

1. An appreciative tone

It’s important that the entire tone of your letter comes off as thankful and conscientious. If you were actually late on your payments due to extenuating circumstances, taking an angry tone probably won’t help your case.

2. Take responsibility

You want to be convincing and honest. Take responsibility for the late payment, and explain why it happened. They need to sympathize with you. Saying you just forgot isn’t going to win you any points.

3. A good recent payment history

Besides sympathy, you want to gain their trust that you will continue to make payments. If your lender sees payments being made on time before and after the period of financial hardship, it might be more willing to give you a break. When you have a pattern of late payments, on the other hand, it’s more difficult to convince them that you’re taking this seriously.

4. Proof of any errors and relevant documents

If you’re writing about a mistake that occurred, still be friendly in tone, but back up the errors with documentation. You’ll need proof that what you’re saying is true. Unfortunately, errors are often made on credit reports, and it may have been a clerical error on behalf of your servicer. If you have any written correspondence with them, you’ll want to include it.

5. Simple and to the point

The last thing to keep in mind is to craft a short and simple letter. Get straight to the point while telling your story. The people reviewing your letter don’t want to read an essay, and the easier you make their lives, the better.

Sample goodwill letter No. 1

Below is a sample goodwill letter for student loans to give you an idea of how to structure your own:

To whom It may concern:

Thank you for taking the time out of your day to read this letter. I just pulled my credit report, and discovered that a late payment was reported on [date] for my account [loan account number].

During that time, my mother fell terminally ill, and I was the only one left to care for her. As such, I had to leave my job, and my savings went toward her health care expenses. I fell on very rough times after she passed away, and was unable to make my student loan payments.

I realize I made a mistake in falling behind, but up until that point, my payment history with you had been spotless. When I was able to gain employment once again, I quickly resumed paying my student loans, making them a priority.

I’m not proud of this black mark on my record, but it’s the only one I have, and I would be extremely grateful if you could honor this request to remove the lateness from my credit report. It would help me immensely in securing other lines of credit so that I can further improve my credit score.

If the lateness cannot be removed entirely, I would still be appreciative if you could make a goodwill adjustment.

Thank you.

Sample goodwill letter No. 2

If you’re writing a letter because the lateness on your credit report is inaccurate, then try something similar to this:

To whom it may concern:

Thank you for taking the time to read this letter. I recently pulled my credit report and found that [Loan servicer] reported a late payment regarding my account [loan account number].

I am requesting that this late payment be assessed for accuracy.

I believe this reporting is incorrect because [list the supporting facts you have]. I have included the documentation to prove that [I made payments during this time / that my loans were in forbearance/deferment and didn’t require any payments].

Please investigate this matter, and if it is found to be inaccurate, remove the lateness from my credit report.

Thank you.

Make sure you provide as many personal details as possible — without making the letter too long, of course. You should also include your name, address and phone number at the top of the letter in case your loan servicer needs to reach you immediately.

Where to send your goodwill letter

Now that your letter is written, it’s time to send it. This can be done either by fax or by mail. Most student loan servicers have their contact information on their website, but you can also look on your billing statements to see if they specify a different address.

Additionally, you can try calling the credit bureau where the lateness was reported to see if they can give you the contact information you need.

It’s important to mention that goodwill letters are not a means to immediate success. Unfortunately, it often takes several attempts to correspond with servicers and lenders to get them to acknowledge that they received a letter from you.

Your best bet is to get a personal contact at the company who has the power to erase the late payment from your credit report.

If all else fails, try as many different communication methods as possible. Phone, mail, fax, live chat (if your servicer offers it) and email them. Several people who have tried this report that it’s possible to wear your servicer down with a decent amount of requests.

Addresses and fax numbers to try

Here are some addresses and fax numbers for several of the larger servicers, as listed on their websites. Again, it may also be worth phoning your servicer to get the name of someone there that can help you. If you have federal student loans, you can also check this Federal Student Aid page for more contact information.

Nelnet

Documents related to deferment, forbearance, repayment plans or enrollment status changes:

Attn: Enrollment Processing

P.O. Box 82565

Lincoln, NE 68501-2565

Fax: 877-402-5816

Great Lakes

Great Lakes

P.O. Box 7860

Madison, WI 53707-7860

Fax: 800-375-5288

Sallie Mae

Sallie Mae

P.O. Box 3229

Wilmington DE 19804-0229

Fax: 855-756-0011

Navient

For anything other than federal loans, check here

Navient – U.S. Department of Education Loan Servicing

P.O. Box 9635

Wilkes-Barre, PA 18773-9635

Fax: 866-266-0178

Cornerstone

P.O. Box 145122

Salt Lake City, UT

84114-5122

Fax: 801-366-8400

FedLoan

For letters and correspondence

FedLoan Servicing

P.O. Box 69184

Harrisburg, PA 17106-9184

Fax: 717-720-1628

EdFinancial

For FFELP and private loans, check here

Edfinancial Services

P.O. Box 36008

Knoxville, TN 37930-6008

Fax: 800-887-6130

Documents to include with your goodwill letter

Don’t let your efforts go to waste by forgetting to send documentation with your letter. Here’s a quick checklist of what you should include:

  • The account number for your loan
  • Your name, address, phone number and email
  • Statements showing proof that you paid (if you’re disputing a late payment)
  • Documentation showing that you’ve paid on time at all other points aside from when you experienced financial hardship (if that’s the case)
  • Identifying documentation so your servicer knows you sent the request

Also note that if you’re mailing anything, you should send it by certified mail with a receipt requested. This way you’ll know whether your letter made it to the servicer.

What to expect after submitting your goodwill letter

Once you submit your goodwill letter, you should hear back from your creditor with a decision in a few weeks. If two to three weeks have passed without word, follow up via email or phone call.

As you know, there’s no guarantee that your goodwill letter will work. The decision to remove a negative mark from your credit report is entirely in the hands of your creditor.

If your creditor rejects your petition, you’ll have to accept the ding on your credit report and take other steps to boost your credit. But if they agree to repair your credit, you should see the delinquency removed from your report and your credit score increase as a result.

A higher credit score can make life a lot easier, whether you want to take out a loan, open a credit card or, in some cases, even rent an apartment. For student loan borrowers, a strong credit score also opens the door to student loan refinancing, a savvy strategy that lets you restructure your debt, possibly changing your monthly payment and potentially saving money on interest.

If your credit score rebounds and you want to take proactive steps to conquer your student debt, refinancing could be the answer you’ve been looking for, so long as you no longer need the protections that come with federal loans.

Either way, though, make sure to keep up with student loan payments so you don’t end up with a delinquent account dragging down your newly repaired credit score.

Resources

If you’re interested in exploring goodwill letters further — and the results that others have had — check out these websites:

  • Ed.gov: They cover disputes, what to do about them and how to go about rectifying them here.
  • ConsumerFinance.gov: If you have loans with a private lender, and your lender had reported you as late when you weren’t, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) to see if they can help you.
  • myFico Forums: The forums on myFico are populated with helpful individuals that might be able to give you contact information for certain servicers. There are some people reporting success with goodwill letters, and they may be willing to share their letters with others upon request.

It’s worth the time to write a goodwill letter

If you’ve discovered that a late payment has been reported on your credit, and it’s because you fell on hard times or is inaccurate, it’s worth trying to get it erased. These dings on your credit are there to stay for seven to 10 years. That’s a long time, especially if you’re young and hoping to buy a house or a car in the near future. It’s a battle worth fighting.

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FedLoan Consolidation or Refinancing: Which Is Best for Your Student Loans?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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If your FedLoan Servicing repayment isn’t going as you had hoped, you might be staring at two seemingly similar options: Both FedLoan consolidation and private loan refinancing would consolidate or group your federal education debt, making for a more straightforward repayment.

But that’s where similarities between consolidation and refinancing end. If you’re unsure about which to go with, read on for the details.

What to know about FedLoan consolidation

Consolidation involves taking out a direct consolidation loan to repay your original federal student loan debt, and it could solve a number of problems.

Most notably, you could make a single monthly payment to one servicer instead of a handful of them (if you have multiple federal loans serviced by various companies). Although that won’t save you any money, it could bring you much appreciated simplicity.

Through federal loan consolidation, you could also expect the following benefits:

  • Choose your new loan servicer, whether that’s FedLoan or a competitor.
  • Become eligible or retain eligibility for Income-Driven Repayment (IDR) plans and Public Service Loan Forgiveness (PSLF).
  • Lower your monthly payment by switching from the 10-year standard repayment plan to an IDR plan.
  • Lock in a fixed interest rate (if any of your older federal loans were tagged with a variable rate).

The benefits aren’t bereft of fine print, however. When you consolidate loans you’ve already started repaying, for example, you reset the clock on any progress toward forgiveness via IDR or PSLF. Also, none of your private loan debt (if you have any) can be combined via a direct consolidation loan.

How to undertake FedLoan consolidation

If the pros outweigh the cons in your case, file your FedLoan consolidation application at StudentLoans.gov. According to the website, most applicants are able to complete the necessary forms in less than 30 minutes.

If you elect to keep FedLoan as your servicer, you can track your application progress via your MyFedLoan account. A resolution should arrive within four to six weeks.

FedLoan Servicing

What to know about student loan refinancing

When you consolidate your federal debt, your new loan’s rate will be a weighted average of your previous federal loans’ rates, rounded up to the nearest one-eighth of 1%.

Via student loan refinancing, however, you could reduce the collective interest rate of your federal debt — and (unlike with consolidation) your private student loans, too — potentially cutting it by whole percentage points.

That’s the greatest difference between FedLoan consolidation and private refinancing — and it explains why many creditworthy borrowers save hundreds even thousands of dollars on interest when working with a private lender.

Say you have four federal loans with FedLoan Servicing worth $35,000 accruing interest at an average rate of 7.00%. Now say you have sterling credit and stable income (or a cosigner who does). By refinancing to a rate of 5.00%, you’d save $4,218 on interest over the next decade.

To be eligible for such savings, however, you — and your cosigner, if you have one — must submit to a credit check. Only applicants with strong credit gain access to the lowest rates advertised by competing lenders. This stands in contrast to consolidation, which has no such credit requirements, making it a more accessible option.

If you have the finances to qualify for refinancing, you could enjoy other benefits besides a lower interest rate, including:

  • Leaving the federal student loan system behind and starting fresh with a top-rated private lender of your choice
  • Selecting fixed, variable or hybrid interest rates
  • Lowering your monthly payment in exchange for lengthening your repayment term and paying more interest overall
  • Releasing the cosigner on your undergraduate private student loans

The cons, however, are just as consequential. In exchange for the perks of private refinancing, you’ll lose access to all federal loan protections. This includes mandatory forbearance (should you need to pause your payments), IDR programs and forgiveness programs like PSLF.

Because refinancing is irreversible once you sign your loan agreement, it’s wise to weigh these plusses and minuses in advance.

How to refinance your FedLoan debt

If you elect to refinance, you can initiate the process by shopping around for the  best possible loan terms. You might also delay your search to improve your credit or find a cosigner who can help you qualify for the very lowest rates.

Once you’ve selected a refinancing lender — whether it be a bank, credit union or online-only lender — it would pay off your FedLoan (and any other eligible education debt). Then your lender would issue you the newly refinanced loan as a fresh start on your repayment.

Try crunching some numbers on our student loan refinancing calculator to estimate your savings (or cost), plus your new monthly payment, when comparing lenders’ quotes.

Should you pick FedLoan consolidation or FedLoan refinancing?

If you have poor credit and no cosigner in sight, you might already have your answer. Consolidation won’t save you money, but it will simplify your repayment, and it’s accessible to all federal loan borrowers.

With strong credit, you might also have the option of refinancing on the table. Whether it’s right for you, however, is another story.

As you’ll see, picking between consolidation and refinancing for your FedLoan debt (or any other loans, for that matter) isn’t just about what you’ll get. It’s about what you’re willing to give up.

This chart might help you as you consider which strategy is best for your situation:

What’s your repayment goal?Do you need federal protections?Your better option is probably ...
Switch to a single monthly payment (for your federal loans only)YesConsolidation
Switch to a single monthly payment (for both federal and private loans)NoRefinancing
Reduce your interest rateNoRefinancing
Work with a new loan servicerYesConsolidation
Work with a new lenderNoRefinancing
Choose a variable interest rateNoRefinancing
Lower your monthly paymentYesConsolidation
Lower your monthly paymentNoRefinancing
Make income-based payments and work toward loan forgivenessYesConsolidation

If you’d like to switch loan servicers, have a single monthly payment and reduce your interest rate, refinancing could deliver all three benefits.

But if you’re not willing to yield your government-exclusive loan options (such as IDR and PSLF), then you could settle for two out of three: Consolidation would allow you to work with a new servicer and achieve a simpler repayment, but not lower the rate.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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