Wednesday, March 8, 2017

Three Possible Reasons Why Student Loans Are Going Into Default At An Alarming Rate

If you have college aged children, have already graduated college, or are just about to embark on your college career, one of the things at the forefront of you mind is probably money related. College is expensive, and most people have to take out student loans to get their degree. And while the interest rates on student loans are usually some of the lowest around, many parents and graduates are still finding it hard to make the payments on their student loans. The number of student loans that are in default is on the rise, and there does not seem to be any end in sight.

Three possible reasons why student loans are going into default at an alarming rate could be:

         Not everyone who starts college ends up finishing the program, and without the degree contemplated at the outset, it is difficult to get the job the program was designed to offer. This leads to a lower income than originally envisioned, making it hard to make the loan payments. And, not finishing your degree program will not relieve you of the obligation to pay back the loans.
         The job market is not a sure thing, and just because you finish a college program, that does not mean you will land your “dream job”. Many college graduates are unemployed or underemployed, but are still responsible for paying back large amounts of student loan.
         The price of other necessities has taken a front seat, and with the cost of living so high it is hard for most families to provide what is needed and have anything left over for other bills. Sometimes it is more critical to make the mortgage payment each month rather than pay a student loan. The unfortunate circumstance for many people in today’s economy is that they have to pick and choose which bills to pay each month.

If you are unable to pay your student loans, you do have options. In rare circumstances you can eliminate student loan debt in bankruptcy, but that is not the case for most borrowers. One other option might be to take steps to have some of your other monthly obligations reduced, so your money is freed up to pay for things you need. A good place to start in this regard is to refinance or modify your mortgage. You can also look at consolidating unsecured credit card debt so you have one payment each month instead of several. For help with your money matters, give us a call.

For more information about managing student loan debt, call us today or reach us online at www.law-ri.com. We will help by looking at the facts of your case and giving you options to reach your financial goals.

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