Types of Debts

• Some students use student loans to pay off their tuition, buy books and pay for living expenses. Student loans differ from other types of more conventional loans such as home or car loans because the interest rate is substantially lower and the repayment is deferred while the student is still in college. Apart from student loans, a majority of students also are in debt because of credit card offers on campus. Credit cards come with hefty interest rates and can take many years to pay off.
  
  

Student-debt Prevention

• There are good and bad debts. Good debts for students are basically necessary debts, such as student loans. Bad debts, is debt that encourages students to purchase items they don't need such as new model cars, designer clothes or other items not necessary for students to get through school. Swimming in debt can cause a lot of negative effects such as stress and worry. Developing wise spending habits can help prevent getting further into debt. Create a budget. Budgeting may give a better picture of one's finances. Working a part-time job is also a potential way to alleviate financial hardships. Paying down or off credit card debt while still in school can help students pay off their student loans easier and with less stress after they graduate.
  
  

Student-debt Management

• Successful debt reduction and repayment starts with a plan. Debt counselors advise students to create a monthly budget. The Medical University of South Carolina's Financial Aid department advises students to also create a filing system for financial documents. Prioritizing debts and paying off the highest interests rates, such as credit and store cards helps a snowball of debt from becoming an avalanche.
  
  

Student-debt Consolidation

• Refinancing through consolidation is a way to ease student-loan debt. Consolidating student loans, or refinancing existing student loans and combining them into one new loan can significantly reduce interest and monthly payments. In the U.S., the Federal Direct Student Loan Program includes consolidation loans that allow students to consolidate Stafford Loans, PLUS Loans and Federal Perkins Loans into one single debt. This results in reduced monthly repayments and a longer term for the loan. Consolidation loans have a fixed-interest rate for the life of the loan.