Stafford, PLUS, Perkins, Direct, private – there are enough types of student loans out there to make your head spin. All of these loans have different criteria and interest rates. This is especially the case if you have loans from before 2012.
Pre-2006, when Stafford loans were variable interest, it often made sense to consolidate when you felt that interest rates were low. While this option may still appeal to folks whose priority is the convenience of one monthly payment, it is not always feasible. For one thing, not all types of loans can be consolidated with all other types.
Even if all your loans are Stafford loans, the interest rate for the consolidation loan is the weighted average of the interest rate for all the previous loans (I believe it is the average plus one-eighth of a percent). This means that consolidation will increase the amount of interest that you pay over the lifetime of the loan. From a purely financial standpoint, then, consolidation is probably not the best move.
However, not consolidating loans means multiple accounts, logins, passwords, and due dates. Depending on how long you were in school and how many types of loans you took out, keeping track of these details can be a huge challenge.
Tuition.io is a free tool that lets you view all your student loans at a glance. Their platform supports both federal and private loans, and if your servicer isn't supported (though most are), you can create a custom loan entry.
Creating my account on Tuition.io was quick and easy. If your loans are federal loans like mine, it imports all your information from the National Student Loan Data System (NSLDS). Once I did this, Tuition.io listed not just my current accounts, but also all the original loans that were “paid off” when I consolidated. The paid-off loans showed a zero balance, so they didn't figure into my overview; it was also easy to delete them so I was only looking my active loans (those with a balance).
Once your account is set up, your home page shows:
- the number of loans
- the total amount of your loans
- your estimated monthly payment
- the percentage of loans you have paid off
- the total amount you will pay over the lifetime of your loans
- the amount you will pay in interest over the lifetime of your loans
Probably my favorite feature of Tuition.io is the amortization chart, which shows you the balance on the vertical axis and the year on the horizontal axis. This makes it easy to see at a glance how long it will take you to pay off your loans.
There is also a sliding scale on the bottom that shows you how much interest you will save and how much sooner you will pay off your loan(s) by making extra payments. For visual types, seeing the difference between the payoff curve under your current repayment plan and your payoff curve if you pay extra can be extremely motivating. See the chart below, where the tan line is the payoff curve with no additional payments, and the blue line is the payoff curve with additional payments of $100 per month:
There are also tabs where you can view your balance by loan, interest rate and monthly payments. There is a calendar feature where you can enter the due date and amount for each account. Finally, under the “my plan” tab, you can view all your payback options to decide what plan is right for you. They even have tools to help you apply for new plans.
If you want to keep your current plan and simply make extra payments, you can use the amortization chart to select which loan(s) you'd target additional payments toward and see how far your dollars would take you.
My experience with Tuition.io
Tuition.io is sort of like Mint for student loans. While Mint provides a complete overview of your finances, Tuition.io provides some really insightful graphs that really let you see how different scenarios can impact your payoff. The amortization chart alone would make Tuition.io a useful addition to my debt-payoff arsenal.
The system does seem a bit wonky if you are on a graduated payment plan. My amortization chart is way off because the future monthly payment increases aren't factored in, which makes the tool slightly less useful. I understand — after all, I haven't been able to get that information anywhere since my loans were migrated to the Federal Direct program, but it would have been nice.
The calendar feature may also be useful if you have lots of accounts and payments to track, since you can have reminders emailed to yourself on whatever date you choose. While, obviously, there are lots of calendars out there that can do something similar, if you use other calendars (such as those connected to your email account) that are shared or public, having reminders emailed to you privately may be useful.
There is also a Tuition.io blog that has lots of information about the student loan industry in general. There are a lot of beautifully done infographics here that give a great overview of a huge and complex industry.
To create an account, you need to enter personal information, including your social security number. For folks who are leery of having this type of information floating around on the internet, this may be a concern.
Tuition.io probably makes the most sense for people who have multiple loans, of multiple types. In fact, the creator of Tuition.io, Columbia graduate Brendon McQueen, has 12 different student loans. With more than 37 million Americans owing over $1 trillion in student loans, there are a lot of folks out there who fall into that category.
Of course, the best strategy is to avoid student debt entirely. Get Rich Slowly has profiled readers that have avoided the student loan trap here and here. Creating a plan in advance to avoid student loans can give you quite a head start later on.