In the process, the report uncovered startling data like: Student loan borrowers are experiencing more financial distress and burden compared with every other type of borrower with consumer debt. In fact: More than one in four student loan borrowers are either delinquent or have defaulted in paying back their loans.
This high distress and burden is a tall order for the 41 million Americans who are estimated to owe around $1.2 trillion in student loan debt.
Here’s what you can do to start effectively repaying your student loans:
- Know Your Loan Relief. Your student loan servicer is obligated to inform you of all of your available repayment plan options. When they fail to inform you, more often than not, that means you are missing out on loan relief that could substantially help you when you need it most. If your loan servicer has not informed you of all of your options (we list the most popular below), pick up the phone, call your loan servicers and demand your right to know all of your repayment options.
- Consider a Repayment Plan for Your Federal Loans Based on Your Income or Your Families’ Size. You may qualify for more favorable repayment plans for your federal loans based on either your income or your families’ size — typically, the smaller the income or the bigger the family, the more favorable the repayment plan you may qualify for.
- Work in Public Service? Two Words: Debt Forgiveness. That’s right, if you work in public service you may be able to acquire debt forgiveness for at least some of your student loans.
- On Active Duty? Three Words: Lower Interest Rate. Borrowers have the right to a lower interest rate if they are on active duty.
- And Last But Not Least: Redirect Money to The Highest-Interest Loans First. Even if you do not qualify for any of the above repayment plan options (Note: We encourage you to do your research and call your loan servicers because the odds are high that you do qualify for at least one of these more favorable repayment plans), you have the right to redirect the money you do pay back to your highest-interest loans, first. You do this via specifying how you want your money to be redirected to your loan servicers. If you have made this request and believe that your loan servicer did not follow through, contact us.
The Government Accountability Office found that around 51 percent of student loan borrowers around the country were eligible for more favorable repayment plans based on their income — and yet only 15 percent of borrowers are enrolled in these plans.
All About Loan Forbearance
Loan forbearance should be a last-ditch option for borrowers who are unable to pay back their loans. It’s a last-ditch option that loan servicers should only recommend once they have thoroughly detailed all other repayment options (loan forgiveness, repayment plans based on in come, lower interest rates for active duty, etc.) Unfortunately, loan servicers like to jump to this last-ditch effort much too fast. Meaning student loan borrowers who are already suffering are pushed onto an even more expensive long term repayment plan. And some student loan servicers even charge borrowers a $150 fee when they put their accounts into forbearance! It’s wrong — it’s lazy on the part of the loan servicer, and there are better options for Americans across the country who dared to get a higher education.
Know Your Rights
You May Be Able to File a Lawsuit If One or More Of Your Student Loan Servicers Failed to Inform You About Any of The Above Repayment Options. A student loan debt lawsuit can help you get on the right path to repaying your student loans. It can help you hold your servicers accountable when they do things that they are not supposed to do, or fail to help you or offer alternatives when you are struggling.
Let’s end student loan debt and hold deceptive student loan servicers accountable when they wrong our nation’s future.