Taking out a student loan is supposed to be a financial investment in your future. Unfortunately, many college graduates learn the hard way that even after graduating, they can’t find a job offering the kind of income that they had once hoped to earn.
It can be very difficult for college graduates to balance their daily financial needs with the obligation to repay massive student loans. Some of these borrowers will eventually end up defaulting on their loans. While a few student loan defaults are the result of bad apples, many people struggling with student loan debt are in that position in part because they don’t get the help and information they need.
Student loan servicers focus on collection activity more than education
Those with tens or hundreds of thousands of dollars in student loan debt will likely have to keep paying off those loans for much of their working life. Sometimes these borrowers may qualify for programs that would help them get their student loan debt under control. Sadly, they often don’t know their options.
Loan consolidation programs, loan forgiveness for people in certain public service careers and even income-based repayment programs can all make student loan debts more manageable. Many times, a borrower who has defaulted or who is close to default will explain their financial circumstances, only to receive pressure to make a payment regardless of their situation.
Instead of connecting these borrowers with resources that would help them make payments, the companies push them past the point of breaking and then initiate aggressive collection activity when the loans go into default.
Bankruptcy often doesn’t resolve student loan issues, although it can be an option in rare cases. Getting help evaluating your student loan situation can help you decide how to regain control over it.