How much money would change your life?
Millennials have officially racked up over a trillion dollars in debt, and most of that comes from student loans, according to a recent report.
The good news is, there are ways you can chip away at that boulder of liability.
As of late 2018, debt among 18- to 29-year-old Americans exceeded $ 1 trillion, which is the highest debt exposure for the youngest adult group since late 2007, according to the New York Federal Reserve Consumer Credit Panel and Equifax.
Many of those bonds were accrued between 2009 and 2013 when enrollment increased in online classes and for-profit education programs, according to Kevin Walker, the vice president of education loans at StudentLoanHero.com, a student borrowing management website.
"During those years, enrollment was skyrocketing, but a lot of those students didn't get their degrees so their income prospects didn't increase but they still incurred the debt," Walker says.
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Overall student loan debt jumped from About $ 600 billion 10 years ago to roughly $ 1.5 trillion today, according to the Federal Reserve Bank of New York.
Nearly 70 percent of graduates from public and nonprofit colleges in 2015 had student loan debt, and the average amount was about $ 30,100 per borrower, according to the Project on Student Debt, an initiative of the nonprofit research organization The Institute for College Access & Success.
A slew of student loan refinancing companies has emerged to provide relief to borrowers who need it including popular lenders like Earnest, SoFi and Laurel Road.
If you have a college degree, good credit and income that lets you comfortably cover your expenses, refinancing or consolidating both private and federal student loans may be an idea worth considering.
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If you're thinking about refinancing your student loans, here are four things to keep in mind, according to Walker:
"Through student loan refinancing, borrowers can consolidate their loans into a single monthly payment to one lender."
It's common for students to graduate with both private and federal loans, which could mean multiple due dates, varying minimum amounts due monthly and several different loan service providers. Consolidating these loans makes things easier to manage, Walker says.
Still, it's not a one-size-fits-all strategy and you could end up paying more than time if you decide to extend your repayment term. The trade-off is that you'll have more money in your monthly budget, according to Student Loan Hero.
"Borrowers should also be aware of what they give up, as turning federal students into a private refinanced loan is irreversible."
Once you convert your federal loan into a private loan, you miss out on some of the income-driven repayment plans offered by the federal government, Walker says. These programs include Income-Based Repayment Plan, Pay As You Earn Plan, Revised Pay As You Earn Plan and Income-Contingent Repayment Plan, according to the Federal Student Aid website.
Most federal student loans are eligible for at least one income -driven repayment plan, according to the Federal Student Aid Office. If you think that you can take advantage of federal loan forgiveness programs, then refinancing to a private loan will relinquish some of those opportunities, Walker says.
"Most banks, credit unions and  other lenders seeking applicants with strong credit scores, as well as steady employment and income. "
You may need a cosigner. Choose someone who has a low debt-to-income ratio and a credit score in the 700s if you want to be approved, Walker says.
If you recently graduated, are underemployed or thinking of changing jobs, Walker recommends keeping your federal loans until you stabilize your employment situation.
"Before rushing to refinance, borrowers should survey their lender options." .
Private lenders offer both fixed and variable interest rates, which can either hurt you or help you, depending on the current and future interest rate market conditions. Refinancing companies typically offer repayment terms ranging from five to 20 years, according to Student Loan Hero.
With federal student loans, you have anywhere from 10 years to 30 years (for consolidated loans) to repay what you owe, according to Student Loan HeroCLOSE
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Follow USA TODAY Reporter Dalvin Brown on Twitter: @Dalvin_Brown.
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