Many student loan borrowers accept the financial aid packages placed before them by their school’s financial advisors. These funds can include numerous private loans covering what federal loans do not. What many borrowers do not realize is that these private loans come with higher interest rates and few relief options if they cannot afford the payments upon graduation. Parents and relatives who co-sign on these loans are also unaware of the consequences.
That’s why when a borrower runs into financial trouble; the problem can quickly become a family affair, leaving parents and grandparents on the hook if they co-signed on these loans. Many co-signers incorrectly think of “co-signing” as the equivalent of providing a reference. They could not be more wrong. In fact, the loan is just as much the co-signers loan as it is the borrowers. Many times, they do not realize the loan is their loan until they try to refinance their mortgage only to have the lender refuse the request because they have too much debt. Unlike federal loans, which typically have the protections of income-based repayment plans and forgiveness programs, private loan borrowers are at the mercy of their lenders.
Private loans make up only an estimated 7 to 10 percent of the $1.27 trillion student loan debt. But with the cost of college increasing, borrowers are left to rely more on these loans as federal loans are not enough to cover all expenses. For the past three years, the Consumer Financial Protection Bureau has been collecting consumer complaints on private loans and has found that borrowers are hitting road blocks when they ask their lenders for help. This should serve as a flashing “buyer beware” sign for prospective borrowers and co-signers.
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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
