Refinance Federal Student Loans – The Whole Story
A rising trend for 2017 is the amount of companies who will refinance federal student loans. But what are you giving up?
Student loans feel like they are designed to snowball your debt into bigger debt until there is one final avalanche. In 2016, businesses were picking up steam to create student loan benefits for their employees. It is a popular trend on the rise, and quite possibly even a bigger, faster rising trend for 2017 is the amount of companies who will refinance federal student loans.
When you sign up for federal student loans you have the right and have access to repayment plans that suit your financial needs. Income-driven repayment plans are key for the struggling borrower. Income-based repayment is the most popular one that is implemented for borrowers because it is very easy to qualify for.
With your federal student loans, you also have three years of forbearance time. Forbearance can be used when you are having a hard time making payments to suspend payments for a period of time from one month to one year at a time. This is designed to help borrowers out for short periods of time. Forbearances are useful when you’re in between jobs or hit financial hardship such as car repairs or doctor bills.
The convenience of these federal student loan perks are a safety net to help you succeed. You may never need them, but they are there for you just in case. If you refinance your federal student loans, you will lose these perks. When you refinance federal student loans you are taking on a new, private loan to pay off the old loan. Your old debt will be gone, but you’re taking on new debt with different terms. Companies that refinance federal student loans may actually have worse terms, and they don’t have to operate within the Department of Education’s guidelines.
If you need help with your federal student loans, read up on the Education Department’s website, or get in contact with Ameritech Financial, a company that specializes in helping you get through your student loans instead of refinancing for their own gain.
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