home loan finance blog
Debt Consolidation may provide relief to college students struggling with overwhelming credit card debt. It is a process where the debtor takes out one loan to pay off others at a lower, or fixed interest, rate.
According to student lender Nellie Mae, over 75% of American college students have credit cards. Over four years of college, students accumulate great loads of debt, sometimes in excess of $10,000. On average, graduating seniors end up owing double what they owed as freshmen.
These are troubling facts. What are these students to do once they leave college and must eke out a living in the real world, while struggling with the burden of mountainous debt?
Credit counseling is an obvious solution. A credit counseling service provides students with the tools to manage their spending and their debt responsibly. Credit counseling companies can also provide students with debt consolidation loans, which allow students to make a single loan payment every month.
Students take note: these loans do not erase your debt! Debt consolidation simply shuffles your debt from one place to another. Debt consolidation programs take time, energy and patience to complete, so please realize that you are not going to be debt-free overnight.
Some argue that the government needs to take more proactive steps in dealing with the emerging debt-riddled student population. Lending to college students is big business for the credit industry. Credit card companies pay big money, in the millions of dollars, to have access to the student population. To achieve the goal of reducing student debt, the government should take steps to limit credit card companies access to and influence over the student population.
Until the government takes steps to lessen lenders grip on college students, credit counseling and credit card debt consolidation may be their only course of action.