Student Loan Borrowers Already Crippled With Debt May Also Struggle With Unfair Loan Servicing
Dallas, TX (Oct. 21, 2015) — The student loan crisis has hit a nationwide high wherein the current balance of all federal loans amounts to $902 billion, with around another $140 billion in private student loans. In all, around 41 million student loan borrowers are being crippled with a $1.2 trillion debt that keeps on rising thanks in part to rising interest and fees.
According to a Department of Education survey of 2007-8 graduates, around two-thirds of recipients of bachelor’s degrees borrow money from the government or from private lenders in order to attend college. The federal government has contracts with 11 student loan servicing companies. Before 2010, federal student loans were primarily made by private lenders. That ended with the termination of the Federal Family Education Loan Program (FFELP) in 2010. Unfortunately, a recent report by the Consumer Financial Protection Bureau has found that federal student loans that are made by private lenders may have a higher rate of financially distressed borrowers. In fact, while one in four student loan borrowers are in default or delinquent nationwide, the report found that nearly one-third of FFELP borrowers are in default or delinquent in repaying their loans.
“The fact is that many consumers who took out private student loans during the financial crisis graduated from college into an extremely challenging labor market. As a result, many borrowers are struggling to repay the student loan money they borrowed during this period. However, during these times of distress, borrowers report that many private student loan lenders and servicers do not transparently communicate consistent information on how to avoid default or provide viable options to resolve delinquencies,” says Baron & Budd shareholder Dan Alberstone. “That’s an indication that the cost of getting an education has not only sky-rocketed, but that there may be other deceptive or wrongful practices at play.”
About Baron & Budd, P.C.
With offices in Los Angeles, Dallas, Austin, New Orleans and Baton Rouge, Baron and Budd, P.C., is a nationally recognized law firm with almost 40 years of national experience “Protecting What’s Right” for people, communities, businesses and other entities hurt by negligence. Baron & Budd’s large size, resources and national presence allow the firm to take on large and complicated cases. The firm represents a number of pressing legal matters involving the consumer, from dangerous pharmaceuticals and medical devices to environmental contamination, trucking accidents, vehicle defects, the Gulf oil spill, financial fraud, overtime violations, deceptive advertising, nursing home abuse and mesothelioma.