Student Loans Default

If you have student loan debt, you know how difficult it can be to pay back. This video focuses on the different things to consider if you’re about to default on your loans. Hope you find this helpful! Below are some related links:

——————————————————————————————————-

Student Loans Default

(2018-11-05)

Student Loans default rate rose to 6.1% in 2018

The Federal Reserve Bank of New York reported Wednesday that student loan borrowers defaulted on their loans at an estimated rate of 1.07 percent in 2018 – the highest since 2010 and well above the 0.98 percent rate in 2017.

Total federal student debt hits $1 trillion

According to a report released by the National Center for Education Statistics, total outstanding federal student loan debt stood at $1.35 trillion at the end of fiscal year 2018. That’s about $65 billion higher than what was owed at the previous high point during the 2008 recession.

Student debt may force millennials to move back home

A study published earlier this month by Apartment List found that millennials would rather live with their parents than pay rent. Those who had already moved back home were less likely to return home again, according to the survey.

Student Loans Default

Student Loan Debt in America

Student loan debt in America has reached astounding numbers over the past few years. In fact, student loans have surpassed auto loans as the largest consumer debt type in the U.S. According to StudentLoanJustice.org, “student loan debt now exceeds credit card debt and automobile loans combined.” This statistic seems shocking, especially considering that these loans were not even designed to help students pay for their education!

Defaults on Federal Student Loans

As mentioned above, millions of Americans have taken out federal student loans to fund their higher education. While many people take advantage of government scholarships and grants, others choose to finance their college educations with private student loans. Unfortunately, the high costs of college continue to increase, which makes private student lending an attractive option. However, as tuition continues to rise, the amount of defaulted loans also rises – reaching $17 billion in 2012 alone. As a result of this staggering number, the Department of Education introduced legislation to limit borrowers’ rights to cancel their loans.

State-Level Solutions

In order to address the rising problem of student loan defaults, some state governments have begun enacting laws to provide protections to student loan borrowers. New York recently passed the Higher Education Opportunity Act (HEOA) that gives consumers the right to discharge all types of private student loans. Other states including Illinois, Iowa, Minnesota, Oregon, and Vermont have also enacted similar measures. These policies are great steps forward in providing relief to those who need it, but they do nothing to stop the issue of higher education cost increases.

The Solution?

Although we cannot change the rising cost of college, we can certainly try to make college affordable for everyone. Instead of increasing our student loan burden, we should be reducing the costs associated with college. One way to accomplish this would be to lower tuition and fees. There is no doubt that public universities charge higher prices than comparable colleges, and there is little justification for this. We don’t ask families to spend thousands of dollars on cars, yet we expect them to shell out hundreds of thousands of dollars each year just to attend school.

College Must Be Reasonable

Another solution to the ever-increasing cost of college is to reduce the size of the academic requirements. For example, if college students could complete community college courses instead of four years worth at a university, then this would save money and time. Additionally, universities should allow students more flexibility regarding credits and degrees. Students would still receive a degree, but they would not have to spend as much time and money doing so.

Why Not Both?

Lastly, we should consider combining both approaches. Many students today graduate with massive amounts of debt, only to find themselves unable to get a job in their field of study. If we want students to pursue careers in the 21st century, then we need to ensure that they have the skills necessary to compete in the workforce. Therefore, we should offer career training programs alongside traditional educational requirements. By pairing a quality education with practical hands-on experience, we can enable graduates to begin work immediately after finishing their studies. This would create an educated workforce that is ready to enter the modern economy and contribute significantly to society.

Here’s a full explanation for how things work…

If you’re unemployed because of school, then the government will pay back your loans if you meet certain conditions. Once you land your job, you’ll start making payments directly to lenders, which means they can cut off your loan immediately — but they won’t actually get the money right away. You still have to repay what you owe during the grace period.

In many cases, though, you won’t fall behind on payments. The first day of class each semester is your official payment deadline, where you should start paying the lender a little extra than you did before classes started. If you’re unable to make any payments after that date, he or she can consider your account past due.

You’ll likely receive a letter about this delinquent status in the mail. And while it may not seem fair, the law doesn’t allow schools to give you special treatment based on your credit history. So even if you’ve never missed a payment before, it’s possible you’re now considered delinquent.

That means you’ll need to provide proof of income (like a paycheck) and prove you’re actively searching for work. Without these documents, the department may deny repayment, even if you’ve been employed throughout college.

Students can find out if they qualify for deferment or forbearance by contacting their loan servicer at any time. Deferments are given in certain circumstances but aren’t guaranteed. For example, you may be eligible for deferment if you’re majoring in education, nursing, pharmacy, computer science, or accounting.

Forbearance isn’t something you apply for yourself – it’s something your loan servicers offer to help you avoid defaulting on your loan. Your loan servicer will contact you if you qualify for forbearance, saying they’ll extend the due dates for your monthly payments.

This is important because interest continues to accrue on your debt while you’re enrolled in school, even if you haven’t made a payment. These additional amounts are added onto your outstanding balance, making your total amount of principal and interest increase over time.

If you do miss a payment, however, you’ll have to begin repaying interest again, starting at the beginning of the next month. If you continue to miss payments, you risk having your entire loan forgiven.

But here’s the good news, and what makes this story unique. According to the Federal Trade Commission, the average forgiveness rate between 2010 and 2014 was just 4%.

It’s estimated this figure will jump to somewhere around 10% by 2020. But if you defaulted on your student loans before 2011, the chances of being granted relief are much lower.

►HEY, we’ve got more valuable information here: ►CLICK HERE LOANS FOR STUDENTS◄

►Cloud of related items ▼

►Loans For Students◄

 

bloque1x