4 things to keep in mind if you are overwhelmed

According to a recent report, the Millennials have officially accumulated more than a trillion dollars in debt, the bulk of which comes from student loans.

The good news is that there are ways to reduce this block of responsibility.

By the end of 2018, the debt of Americans aged 18 to 29 years exceeded the trillion dollars, the highest risk for the youngest group of adults since the end of 2007, according to the report. Panel of consumer credit of the Federal Reserve of New York and Equifax.

According to Kevin Walker, vice president of education loans at StudentLoanHero.com, a student loan management website, many of these bonds were acquired between 2009 and 2013, when the number of course registrations in online and for-profit education programs has increased.

"Over the years, enrollment has skyrocketed, but many of these students have not graduated and their earnings prospects have not increased, but they have still incurred the debt," he says. Mr. Walker.

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According to the New York Federal Reserve Bank, student loan debt has grown from about $ 600 billion 10 years ago to about $ 1.5 trillion today.

According to the Project on Student, an initiative of the nonprofit research organization The Institute for College Access, nearly 70% of the graduates of public and non-profit colleges in 2015 had student loans. The average amount owed was about $ 30,100 per borrower. .

A large number of student loan refinancing companies have emerged to relieve borrowers who need them, including popular lenders like Earnest, SoFi and Laurel Road.

If you have a university degree, good credit and income that allows you to comfortably cover your expenses, refinancing or consolidating private and federal student loans may be an idea to consider.

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If you are considering refinancing your student loans, consider the following four points:

"Through the refinancing of a student loan, borrowers can consolidate their loans into a single monthly payment to a lender."

It is common for students to graduate with private and federal loans, which can mean multiple due dates, variable minimum amounts due monthly, and multiple loan managers. Consolidating these loans can make things easier to manage, says Walker.

Nevertheless, this is not a unique strategy and you could end up paying more over time if you decide to extend your repayment term. The tradeoff is that you will have more leeway in your monthly budget, according to Hero Loan.

"Borrowers also need to know what they are abandoning because turning a federal student loan into a refinanced private loan is irreversible."

Once you convert your federal loan into a private loan, you miss some of the income-based repayment plans proposed by the federal government, says Walker. According to the Federal Student Aid website, these programs include an income-based repayment plan, an on-going plan, a revised plan at source and an income-based repayment plan, according to the website.

Most federal student loans are eligible for at least one income-based repayment plan, according to the Federal Office of Student Aid. If you think you might want to take advantage of federal loan forgiveness programs, refinancing into a private loan gives up some of those opportunities, says Walker.

"Most banks, credit unions and other lenders are looking for candidates with strong credit ratings, as well as stable employment and income. "

You may need a co-signer. Choose someone who has a low debt-to-income ratio and a credit score of 700 if you want to be approved, Walker says.

If you have recently graduated, are underemployed or plan to change jobs, Walker recommends retaining your current federal loans until you stabilize your employment situation.

"Before rushing to refinance, borrowers should consider their lender options."

Determine the interest rate and APR you will get with each lender and compare it with what you already pay, says Walker.

Private lenders offer fixed and variable interest rates that can hurt you or help you, depending on the current and future conditions of the interest rate market. Refinancing companies typically offer repayment terms ranging from five to twenty years, according to Student Loan Hero.

With federal student loans, you have between 10 and 30 years (for consolidated loans) to repay what you owe, according to Student Loan Hero.

Follow USA TODAY Reporter Dalvin Brown on Twitter: @Dalvin_Brown.

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