Are Private Student Loans Your Best Bet?
Although most of us have grown comfortable with the idea that financial assistance is required for students to attend college today, concerns continue to mount regarding the $1.5 trillion (and ever-growing) cumulative debt owed by over 44 million borrowers around the US. College tuition continues to rise, more students than ever are taking out loans, and loan servicers continue to fund them; in fact, federal student loans may have very little underwriting, require almost no credit background whatsoever, and may even offer better interest rates in the long run.
Private student loans can be enticing for a few reasons, particularly if you have exhausted all the federal funding, grants, and scholarships available to you. This can be especially true if you are a graduate student, facing lofty annual tuition, and looking for a lender to cover most of your balance. And while there are many benefits to federal loans, you may have turned to the private student loan for other flexible features, like variable interest rates—which can be beneficial in some economic times, and especially if you plan to pay off your loan more quickly. Private loans may also offer interesting incentives like discounts for excellent grades, and release of co-signers after payments have been made on time for a certain number of months.
Issues arise for many borrowers, however, who graduate or drop out and then find out later that not only are they beholden to pay back an extremely large sum of money, but they really don’t have the funds. Private loan servicers do not offer the flexibility that federal student loan servicers do, and in fact, they offer a large array of options to borrowers, from deferment and forbearance to income-based repayment, and even forgiveness. Without flexible, continued delays, some may be left with massive repayment issues and a lot of questions regarding what to do. Delinquencies on a private student loan are considered a default usually around 120 days, and at that point, the entire amount may become due. While repercussions can be stringent after federal loan default, private loan servicers may file collections lawsuits that have the potential to turn into default judgments if not handled in a timely—or correct—fashion.
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