Student Loan Delinquencies Rise Hand in Hand with Consumer Debt
As the student loan debt crisis ensues, it is certainly no surprise to hear about heightened student loan delinquencies. In fact, some experts predict that such action will continue to the point of 40 percent in default by 2023. And all of this is happening with very little decline in borrowing. Now, recent news continues to confirm these trends, pointing out that consumer debt continues to rise, along with borrowers failing to make payments on student loans.
Considering the average 20- to 30-year-old borrower is beholden to loan servicers for over $350 a month on average, it comes as little surprise to find that they may not only be severely financially stressed (to the point of not being able to pay for essentials in some cases), but also falling down on the job when it comes to actually sending the money. This is even more of a problem for borrowers with private student loans in comparison to those with federal loans; those with the latter may at least be able to take advantage of a wide range of alternative repayment plans, along with programs like forgiveness, wiping the slate clean permanently.
Private student loans are more on par with a mortgage or vehicle loan in that they are usually ‘secured’ by a co-signer, meaning that if that younger borrower defaults, a parent is usually on the loan. A default may also mean the potential for a collection lawsuit by the loan servicer and even default judgment if you fail to reply to a summons and lawsuit or lose the case and are at their mercy for more aggressive debt collections.
The Federal Reserve Bank of New York reported in November that student loan delinquencies rose 9.1 percent, compared to 8.6 in the second quarter. This spike was noted as the largest jump in seven years. If you are having trouble paying back your private student loan, it is important to do everything possible to avoid a default, as the repercussions could haunt you for many years afterward, beginning with the damage to your credit. Legal action and the possibility of wage garnishment, property seizure, and bank levies can cause major financial headaches on top of other debt issues you may already be enduring.
Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan? Contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Call us today for a free consultation at (855) 709-5788 or email us at email@example.com.
Posted in: Student Loan Debt