Bankruptcy Should Be An Option For Some Student Loans: Report

Through this partnership consumers and consumer advisors who use MortgageKeeper to access a broad directory of resources will be directed to the SLA to access assistance by a national student loan counseling provider. A wide range of consumer advisors use MortgageKeeper to provide numerous support services; advisors include hundreds of nonprofit counselors across the country and mortgage servicer representatives. MortgageKeeper is highly focused on expanding the use of our tool so no consumer in need goes without services that are within reach. Our partnership with SLA assists our efforts to ensure student loan borrowers have access and consumers with student loan debt, who depend on our services, receive quality counseling provided by reputable nonprofit counselors part of the Student Loan Alliance, stated Rochelle Nawrocki Gorey, President of MortgageKeeper. The Student Loan Alliance will also link student loan borrowers to other services provided through MortgageKeeper in more than 20 different service categories The President and CEO of SLA, Larry Gilmore, stated, The Alliance is excited to be partnered with a consumer focused organization like MortgageKeeper. Our counseling agencies know that borrowers with student loan debt challenges typically have other challenges and are in need of other supportive services.

The CFPB has suggested Congress review the laws restricting private student loan borrowers from discharging their debt in bankruptcy, and some lawmakers have introduced bills to make such a change . However, CAP’s bankruptcy proposal would also include federal loans, as the report notes that Parent PLUS loans don’t offer protections like income-based repayment plans. “Ultimately this is something where Congress will have to act,” said Bergeron, formerly the acting assistant secretary for postsecondary education and deputy assistant secretary for postsecondary policy, planning and innovation at the U.S. Department of Education. Bergerson said this reform is unlikely to be something the Obama administration could implement on its own.

Government Switches Student Loan Servicers: What You Need to Know

2) Many students have more than one loan, resulting in a sum total of loan payments that can be overwhelming.Understanding the risks can help mitigate untimely exposure to unsustainable repayment agreements. 3) Excessive loans can negatively impact credit ratings, increasing interest rates and resulting in a higher total cost of ownership for essential items such as car and home purchases. To help manage financial repayment of student debt, the following tips are recommended for new graduates, current students, or anyone struggling with student loan repayment. First, Know Your Options There is a wide range of loan types.Federally guaranteed loans generally allow extended, graduated, or income-based payments.Each has advantages.Extended repayment allows you to stretch out repayment up to 25 years. Graduated repayment starts out with a low monthly payment, which then increases about every two years, a good option if you expect your income to also increase.Income-based payments are based on a combination of household size, income, and loan balance, which is good if you have an unstable income.Of course, any sort of arrangement that doesnt pay off the loan quickly will result in greater interest paid over the life of your loan, but that option is better than defaulting on an agreed loan schedule, or missing payments, which causes long-term financial damage but can often be avoided. Second, Consider a Student Loan Consolidation If you havent gone into default on your student loans, then you can ask your lender for a forbearance, or deferment.In simple terms that means you will be exempted from a set number of payments, although interest will still accrue during this period.There are a number of qualifying conditions, such a medical or personal problems, or other reasons you can document to justify an impact your ability to make payments as agreed.Sometimes you can even qualify if youre already in default, but in every case it is best to find out about your options before you need them.

Time to Bring Bankruptcy Back for Student Loan Debt

The latest figures show that about one in nine student loans are now 90 days delinquent or more. (And delinquency rates in general are much higher .) Total student debt sits at about $1 trillion, more than either auto loans or credit card debt. The issue so consumes the middle classfrom parents planning to pay for their children’s college all the way down to debt-wracked recent graduates that Barack Obama is setting off on a ” bus tour ” to tout his plans for making college more affordable. One way, of course, would be to bring down the ever-rising price tag of college tuition. That process, which will be driven by good old-fashioned supply and demand and customer outrage and increased appropriations from broke-ass state governments, will not happen overnight. In the meantimefor the millions of people who are already laboring under loads of student debtit would be nice to allow for a sober and responsible route into bankruptcy for student loan debt, just like there is for other kinds of debt.

Managing Student Loan Debt

Minsky, a Boston lawyer specializing in student loan law, said he has had several people contact him as they receive transfer notification. 4 Ways to Pay Off Your Student Loans Faster “They were contacted by a company they had never heard of before saying, We’re going to be your new loan servicer, please start paying us,” Minsky said. “Borrowers aren’t being notified until the transfer is just about to happen or has already happened. That can be really scary for borrowers.” How to Prepare for the Move Though the Education Department hopes the transition will go smoothly, as stated in the announcements, those with student loans may want to take a proactive approach to the changes. “People need to be careful and make sure everything transfers correctly,” said Heather Jarvis, a student loan expert. Jarvis said past transfers have yielded numerous reports of errors.


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