Topic: Education Law
The student loan problem obviously isn’t going away anytime soon, as millions of Americans—many with degrees and many without—can attest. While optimism is usually a large part of the equation as students around the country sign on for federal and private student loans, the attitude is usually drastically different years later when they still feel the burden of monthly payments that may be making life difficult; in fact, student loans have caused many to put their lives on hold. Because of the financial strain, some carrying loans must delay buying homes, nicer cars, getting married and having kids, and more.
Becoming delinquent on loans means consequences to the credit, and a default is even worse as the borrower’s credit score takes a major hit and there is not only the realistic expectation of ongoing debt collection activity but the threat of lawsuits too. The problem is getting a lot of attention today, but even with new income-based repayment plans and other available options, many borrowers aren’t biting—they are still just bailing. And with over $1.3 trillion in student loan debt out there, there is cause for economic concern nationwide.
The Washington Post reports that a recent study shows even more startling statistics. Even with the amount of repayment, deferral, and forbearance programs available, delinquencies and defaults are rising. The Consumer Federation of America (CFA) study shows that millions had not made payments for at least nine months last year. The CFA states that these results, just released recently, show an increase of 14 percent in defaults when compared to 2015.
“Despite a rising stock market and falling unemployment [rate], student loan borrowers are still struggling,” said Rohit Chopra, a senior fellow at CFA “The economy remains very difficult for so many young people just starting out.”
“More than 1 million people defaulted last year, and most of that could have been prevented by loan servicers. Too many of them put their own bottom line before the best interest of borrowers,” Chopra said. “There are too many people given the runaround.”
Many continue to be disgruntled that student loans are so difficult to discharge in bankruptcy, as extreme hardship must usually be demonstrated. There is also resentment toward colleges and universities for not offering better resources and education regarding student loans, preparing students for the eventuality of a long-term loan that could be difficult to pay back if a career did not pan out or hopes for income were not realistic. The average amount of student loan debt now hovers at just under $31,000. CFA states that since 2013, this number has risen by 17 percent.
If you have questions about your student loan debt or if repayment is currently a challenge, contact Fitzgerald & Campbell, APLC, a law firm with decades of experience in helping clients to explore their financial options. Let us review your case and help you decide the best route. We are here to help you!