Your Debt Solutions Experts
BDO Grande Prairie

9805 97th Street Suite 200,
Grande Prairie, Alberta
T8V 8B9
Phone: (780) 539-3810

Is Consolidation the Right Option for My Student Debt?

If you’re thinking about debt consolidation for your student debt, you should know, there are advantages and disadvantages. But first, let’s talk numbers.

There’s no doubt about it, student debt is still an issue in Alberta. A recent BDO poll about the effects of student debt revealed that

  • Alberta grads under 40 with student debt owe an average of $19,496.
  • Two-thirds of Canadians between 21 and 39 with a degree or diploma graduated with debt.
  • Six in 10 of those grads who graduated with debt are still paying that debt off.
  • Seven out of 10 grads with student debt have sought relief of one kind or another.

If you’re juggling multiple debts along with your student loans, it’s tempting to consider debt consolidation to simplify your payments and perhaps save on interest. Here’s what you should know before you decide:

What are the advantages of debt consolidation?

You can find more information about debt consolidation here, but a quick review of the advantages include:

  • Fewer monthly debt payments to track
  • Lower interest rates
  • Fixed date that the debt will be paid off

Is there a reason I shouldn’t explore student debt consolidation?

If your student debt is primarily government loans then debt consolidation may not be as effective. Government loans tend to have lower interest rates than bank consolidation loans.

If you’re struggling to repay your government student loan, the  Repayment Assistance Plan (RAP) may be a better option for debt relief.

If you’re carrying different types of student debt from private lenders — like bank loans, a line-of-credit and credit card debt — then student debt consolidation is worth exploring.

How can you make your money go further to reduce debt?

In our poll, nearly one in five grads with student debt had taken on another job in addition to working full-time to pay off debt. Earning extra income can be a key strategy in being able to reduce your debt. But what if time constraints or family responsibilities make it impossible to take a second job?

Here are some simple tips to help you make the most of what you earn:

What kind of debt relief or assistance have you sought for your student debt? Join the conversation on Twitter using #StudentDebt and #DebtSolutions

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