For a number of individuals, what they borrow in student loans can end up being only a portion of what they wind of up owing. Student loan debt stands at a staggering $1.5 trillion and outstanding student loan debt has tripled over the last decade in the U.S. This is in part due to many borrowers seeing their balances spiral out of control. According to Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, “There are ways these loans are structured that encourage this ballooning.”
Many schools have hired consultants to ‘encourage’ struggling borrowers to put their loans into forbearance, which provides a temporary postponement of payments, for a three-year window, according to an April report by the Government Accountability Office (GOA). While forbearance prevents a borrower from defaulting and accumulating late fees, there are better options, such as income-driven repayment plans.
When a borrower’s student loans go into forbearance the interest on the debt continues to accumulate. Borrowers are often shocked by the new, higher balance. Another disappointment is the 2007 program, Public Service Loan Forgiveness, which allows certain student loan borrowers in government or non-profit public service jobs to wipe out their remaining debt after 10 years of on-time payments. However, a number of students claim that after making 10 years of payments and trying to obtain forgiveness on the remaining balance, were told they did not qualify because they had the ‘wrong type’ of loan. The Consumer Financial Protection Bureau issued a report last year about how many people believe they are paying their way toward Public Service Loan Forgiveness only to learn they do not actually qualify for one technical reason or another.
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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. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all 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 McMaken 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 McMaken website at www.miamibankruptcy.com.
