Student Loans: You May Be Surprised to Learn Who is Defaulting
The student loan crisis has affected individuals of all ages in the United States, with a cumulative total of nearly $1.6 trillion owed, spanning over 45 million borrowers, and an alarming number of them defaulting. Just as borrowers come from all walks of life, their attitudes towards student loans later and their debt ratios are varied as there are so many different elements to factor in—like the types of schools attended, amounts required for tuition, a variety of programs and degrees, and more.
Unfortunately, many borrowers are under extreme duress regarding private student loans especially. Federal student loan servicers may have much more flexibility to offer borrowers when their income is reduced – or they simply do not make as much as they thought they would out of school – and they cannot crack the nut on what may be over $350 a month or more. Private student loan servicers, in comparison, may not be able to offer many alternatives for borrowers who cannot pay, other than to launch ferocious collections activities and then collections lawsuits on early adult households who may be burdened and seriously strapped for cash.
While there is much discussion regarding the plight of borrowers—and especially graduate students—the irony is that the greatest number of individuals in default are probably those who owe the least. Recent news confirms that while most of us are aware of the crisis at hand, it may be surprising to learn that borrowers left to pay back $10,000 or less tend to be in default more often than those owing more—and sometimes substantially more.
“The large debts we hear about are often taken out by graduate students — people who get an MBA or who get an M.D. or get a law degree or get a master’s,” says Susan Dynarski, an economist at the University of Michigan.
Dynarski points out that students who graduated are generally not those in default either as they generally have an easier time finding a job in their field and making a suitable income to pay back loans.
“The people having problems with their debts are those who dropped out of school after just a few courses or a year,” Dynarski says.
Delinquencies and defaults are only expected to grow, and there seems to be no end in sight for the millions of borrowers, an escalating crisis, and new students entering the scene continually with new loans that will also have to be paid back or dealt with somehow.
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! Click here to schedule a free 30-minute consultation, call us at (855) 709-5788, or email us at firstname.lastname@example.org.
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