Today, 42 million Americans owe 1.3 trillion dollars in student loan debt. The Department of Education estimates 40% of borrowers, roughly 10 million students, are behind on loan payments, and, of those, nearly 4 million students are in default.
Student loan debt is following borrowers into retirement. According to the Consumer Finance Protection Bureau (CFPB), many student loan obligors are found to be aged 60 and older. Their student loan debt has nearly doubled in ten years from $12,100 to $23,500, forcing many to forego health care to avoid default. Many older borrowers are also saddled with their children’s debt as cosigners or direct borrowers.
Some borrowers default on their loans in frustration. While defaulting on your student loan won’t land you in jail, it will definitely ruin your credit, so it’s best to be proactive and protect yourself from student loan debt.
According to Tampa attorney James W. Elliott of the McIntyre Thanasides law firm, the worst thing to do is ignore student loan debt. “While it’s rare for loans to be forgiven, even during bankruptcy, there are other options,” Elliott says. “Consumers must realize that there are real repercussions for not addressing your student loans, including garnishment of your paycheck or other federal benefits. Our firm has formed a student loan law practice group to help guide consumers when it comes to dealing with their student loan obligations.”
"There are real repercussions for not addressing your student loans."
There are free options that eliminate the need to default on your student loan or miss payments. The CFPB can help you manage your student loan debt and even assist in removing a default status from your credit report. Avoid student loan debt relief scams that trick borrowers into paying upfront fees promoting student debt reduction. If a company seeks to enroll you in a payment plan for a fee, it’s a scam. All student loan borrowers are entitled to payment plans for free; those in retirement or have had an income reduction may even be entitled to reduced payment or payment suspension.
“Do not let yourself be bullied or told otherwise by the company administering your loan payments”, advises Elliott. “Often, the private contractors that administer the loans make money off the students”.
In fact, many companies are paid commissions and bonuses to collect outstanding payments. Despite attempts to reform the student loan industry, there is little to no federal oversight over the private contractors who are incentivized to increase profits by collecting as much as they can.
"Nearly 4 million students are in default."
Visit Consumer Finance Protection Bureau’s website for more information about solutions to student loan debt. Additional resources are available on the Department of Education’s student aid website.
Have your case evaluated by contacting attorney James W. Elliott at (813) 223-0000.
