Tennessee readers know that many people who go to college leave with student loan debt. With the rising cost of tuition, room, board and textbooks, most people are unable to manage the cost of college on their own, and student loans often seem like the answer. The result is a crisis — thousands of graduates with significant debt burdens they are unable to manage on their own.
Sadly, many people end up defaulting on student loans because they cannot make the payments, which results in accumulating interest. The final product is often a balance that is more than double the actual amount of money borrowed. As awareness of the student loan crisis grows, it is possible that some lenders have deceived and taken advantage of many student loan applicants.
A growing financial crisis
One example of the disturbing way that lenders have treated student loan applicants is a mother who took out a loan of about $6,000 to go to school to earn a specific type of health care degree. The details of her situation are as follows:
- She enrolled in a forbearance plan put forth to her by her lender. This would allow her to delay payments when she could not make them without the risk of going into default.
- The lender failed to inform her that even during a time of forbearance, the interest would continue to accumulate on her loan.
- She only learned of the exorbitant amount of money she owed after she learned her tax return would not come to her, but would go to pay off what she still owed.
- The lender also failed to tell her that there were certain government programs that would have provided her relief through low payments and eventual loan forgiveness.
Sadly, this is just one example of how some lenders use predatory practices to mislead applicants and leave them with debt that they could never hope to repay on their own. There is evidence that lenders steered people away from better options, tricking them into more expensive and complex plans that were detrimental to the applicant.
Did this happen to you?
There are many people struggling to keep up with student loan payments and deal with harsh creditor practices, such as wage garnishment. If you find that you are in a place where you cannot hope to catch up on your own, there could be options available to you.
While bankruptcy is not always able to discharge student loans, it is technically possible. You do not have to face this alone, but could find it useful to seek an explanation of the options that may be available to you.