For many American students, the journey of finding the right higher educational institution, getting accepted, earning a degree and graduating are only the beginning of life’s long journey. All too often, the money borrowed to pay for that journey can become a financial albatross that hangs around a graduate’s neck for a significant part of their life.
Settling a student loan debt amidst hard economic times can be a real nightmare for many students in America. Today, there are over 50 million student loan debtors whose debt in the U.S. reached another all-time high of $1.5 trillion in 2019, according to Experian data. That’s an increase of 116 per cent in just ten years and represents one of the country’s most significant and widespread financial burdens.
Managing Student Loan Debt
Whereas borrowing for college and perhaps graduate school with a private student loan is an investment in your future, the resulting degree in a highly competitive occupational environment today doesn’t ensure instant success or even reasonable wages. According to a national survey conducted in February 2019, the median annual wage for workers with a bachelor’s degree was just $51,800. All too often, those wages will barely cover the student loan debt interest.
Defining Private Student Loan Debt
Private student loans are those issued by high-profile banks, like Citigroup or Chase. These loans can often fluctuate and have high interest rates that, if your degree doesn’t produce a high-paying job after graduation, can follow you for the rest of your life. Within the private student loan industry, there is a tremendous amount of money exchanging hands which often lends itself to unscrupulous and harassing debt collectors and practices according to industry leaders in debt law.
The Consumer Financial Protection Bureau, a government financial watchdog agency, reports that many student loan lenders, servicers and debt collectors are breaking the rules by threatening borrowers with lawsuits even though they have no intention of suing. Some lenders mislead borrowers about the benefits of immediately repaying a defaulted student loan which can be deemed illegal under the Fair Debt Collection Practices Act, a statute that can also protect you against a debt lawsuit and help with debt harassment.
Understanding the Difference Between Federal and Private Student Loans
Federal loans have a fixed interest rate and may offer a variety of repayment plans. Private loans generally aren’t as flexible. And unlike federal student loans, private loans often have variable interest rates and require credit checks. If you have below average credit, you could end up paying high interest rates. Also, because private student loan rates can fluctuate according to stock market conditions, the interest rate you initially qualified for could change over time.
The repayment terms on private student loan debt vary by lender. With some lenders, repayment begins immediately. Other lenders may allow borrowers to defer loan payments while attending classes. That can be a double-edged sword as deferred payments and interest can build over time and become an even larger financial burden when payments come due.
Many legal firms specialize in battling private student loan debt. In fact, you can gain protection from a lawsuit at GM Law Firm in Boca Raton, Florida, and seek debt resolution though a variety of strategic defense positions.
“If you are struggling with your private student loan, do not ignore it or make financial mistakes such as only making a minimum payment to stop the debt collectors,” asserts Chantel Grant, an expert in lawsuits related to debt and Senior Partner at the GM Law Firm. “This is a serious legal issue that often requires an attorney-negotiated, student loan debt defense strategy to help successfully defend against a debt lawsuit and hopefully resolve the student loan.”
To combat the potential life-long financial burden of a private student loan debt that seems impossible to pay down, retaining a legal private student loan debt specialist can be the best route to create a sound debt defense and avoid a potential lawsuit. The ultimate goal is to put the intimidating student loan situation behind you and focus on a bright, successful career.
Call Law Offices of GM Law today to help you best understand your rights and how to achieve debt resolution.
