Ethnicities & Women Heavily Affected by Private Student Loan Burdens
If you keep a good eye on the news, chances are you don’t make it through one day without hearing about the plight of student loans and borrowers in staggering amounts of debt. This may hit home hard if you are still paying on your own student loan, and it may be a burden that you have been carrying for decades.
As the crisis continues around the United States, no one really knows what to do. While the whole idea behind student loans is to support individuals in our country who want to become educated, and while many are doing so, they may later be extremely regretful, and even consider the whole experience to be a waste of time.
Today, around 11.5 percent of student loan borrowers are in a state of serious delinquency or default. This is expected to increase exponentially just in the next several years, meaning that the $1.6 cumulative debt owed by borrowers—with many of them quite young—will only grow, inciting further alarm. Ironically though, continuing studies show that a surprising number of individuals are carrying the greatest number of defaults: those with loans under $10,000, and ethnic groups.
Even more surprising, recent news shows that black students may start out with twice as much debt as other student peers. Analysts also expect that gap to continue growing too. Today, default rates continue to increase, and with a staggering number of black students defaulting within 12 years at a rate of five times that of other students; in fact, data shows that 38 percent of black students defaulted.
“But even after accounting for student and family background characteristics (such as family income, wealth, and parental education); total amounts borrowed; college experiences (including type of institution attended, degree attainment, and college GPA); and post-college employment status and income, there remains an 11-percentage-point Black–White disparity in default rates,” states Judith Scott-Clayton in ‘Shrinking Racial Gaps in Student Debt and Default: Recommendations to Congress.’
Private student loans heap even more stress on borrowers, with larger amounts normally owed, and little flexibility when it comes to the need for alternative repayment plans or help in the face of potential default. While many servicers obviously do not want to lose out on seeing a debt satisfied, these lenders tend to be more like large corporations offering mortgages or vehicle loans. And the collections activities can be aggressive. If you are in danger of defaulting on your private student loan, try every avenue possible to avoid such action, and prevent issues like collections lawsuits and default judgments.
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.
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