Student Loan Debt: Are Repayment Rates Being Intentionally Suppressed?
As the student loan crisis continues to escalate in the US, one must hope that there is some good coming out of the enormous amounts of money many young people (and individuals of all ages too) are borrowing—often with little idea of how difficult it will be to pay back such sums later. The goal is to for these funds to offer an educational foundation that allows graduates to take on the careers of their choice, earn a suitable income, and go forth to prosper. While that is the case for some, it is disturbing to realize how many students simply don’t graduate—or move forward after receiving their diplomas only to discover that the job market is fierce, and rife with many who do not possess degrees. This is even more disturbing for graduate students who may have taken on even larger private student loans.
Today over 45 million borrowers are responsible for a staggering cumulative debt of nearly $1.6 trillion. Recent news citing a study by Moody’s Investors Service shows even more disturbing information too: although students could be borrowing less, they owe more. This is part of a continued and disturbing trend that causes many borrowers to state that they feel like their student loans will be with them for their entire lives.
Moody’s data points to the root of the problem: too many borrowers simply are not repaying their loans; in fact, they could have been paying on their student loans for years without making any dent in the balance at all. Moody’s also postulates that repayment rates are being ‘materially suppressed’ as borrowers fall behind in paying monthly interest accruals—causing their balances to rise instead of fall.
While defaulting on a federal loan comes with a host of nasty repercussions, such as tax refunds intercepted or financial accounts frozen, private student loan defaults offer their own list of challenges—mainly when borrowers are sued in collection lawsuits—often bringing very young graduates into the legal system. Without a reply or the launch of a defense, such borrowers leave themselves open to even more aggressive collections activity such as garnishing wages, seizing property, and more, upon the granting of the default judgment. If you are currently concerned about defaulting on your student loan, it is recommended that you exhaust every other financial option first.
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.
Posted in: Student Loan Debt