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Private Student Loans: Expensive, but the Only Option for Some Students

students
  • Oct 28 2020

The climb into adulthood can be a steep ascent. Managing a household budget, completing your education, and getting a job all play a large role in getting out on your own. Before you can really dig into that dream job though, in most cases you will need a college diploma. In some cases, graduate work is required too if you are competing for a more advanced job or dealing with a fiercely competitive job market. If you are lucky, you may even have an employer who pitches in for part—or even all—of your tuition, but such incentives can be rare.

Tuition is rising at accelerated rates at colleges and universities around the US, yet students continue to aspire to receive a college education; in fact, more US citizens than ever were enrolling in college previous to the COVID-19 pandemic. The cost for attaining a four-year degree may be high, but with minimal counseling offered to younger students upon entering and exiting school, they may not have a firm grip on what it actually takes to make a substantial payment each month to a loan servicer. Hopefully, grants and scholarships are taken advantage of first, and then federal loans are used. In many cases though—and as you may have discovered—federal funds are extremely limited, leaving borrowers to turn to the option of private student loans.

Viewed as one of the most common options, private student loans (burdensome as they may be) are not always that easy to come by. Such funding usually involves strict underwriting requiring the borrower to show a solid job history, good credit rating, and the ability to pay on a loan moving forward. Without such credentials, co-signers are usually relied upon to gain approval. That scenario is not without complexity, however, meaning that a well-meaning family member or friend could be served with a collections lawsuit if you fail to pay on your loan. In some cases today, potential borrowers may be so desperate that they are willing to pay for co-signers!

Students going on to get graduate degrees are most inclined to apply for private student loans, ranging from $30,000 to $100,000. As tuition keeps increasing, so does the need for private student loans. Currently, over 45 million borrowers are left to pay up for a cumulative $1.64 trillion in student loan debt. As the crisis has continued to loom large, experts and government officials have explored why there is such a predicament, and how to fix it. Undoubtedly, you will have had your fill of hearing about many different promises in the 2020 presidential campaign too, from reform to cancellation.

If you are currently struggling with your student loan though, it is critical to avoid default at any cost. Private loan servicers have the ability to pursue you aggressively, with collections lawsuits and extremely negative repercussions stemming from 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. We are here to help! Click here to schedule a free 30-minute consultation, call us at (855) 709-5788, or email us at info@debtorprotectors.com.

 

Posted in: Student Loan Debt