There is much talk about student loan debt and much concern about borrowers who default or are delinquent in making their payments but it seems that we are not talking about why. Many times people assume that borrowers are just being negligent or just don’t want to pay the debt which in some cases may be true. However, there is one big factor that most people forget.
Servicing companies are essentially hired by the Department of Education to ensure borrowers pay back their debt. They also rely on servicing companies to make sure the borrower is aware of all of their options so that they are getting a payment they can afford under the government regulations. But according to numerous lawsuits, this may not be the case. (New York Times). I have found through my own research that many borrowers are not advised on their options or are not given the best advice on how to manage their loans. This can leave borrowers feeling confused about what to do. Even worse, it could mean they lose out on qualifying for forgiveness that they should have received.
One borrower told me their lender put them in forbearance rather than the Income-Driven Repayment plan so they didn’t qualify for forgiveness. Another explained how their loans were never consolidated into Direct loans so they worked 10 years as a teacher only to find out they didn’t qualify. Yet more seem to be confused about the process altogether because of so much run around from their servicing company. They could have qualified for lower payments and forgiveness but never set it up because it seemed unrealistic.
This should not happen. It is bad enough that borrowers have so much debt on their shoulders after leaving college. They should at least be provided with accurate options to manage the debt correctly. Even those who are provided some of the correct information have a hard time ensuring they have done everything they need.
I have a client who has worked as a nurse for over 10 years. She expected to qualify for Public Service Loan Forgiveness but like 99% of all the other applicants who applied, she was denied because she simply didn’t have her loans in the right repayment plan and had not consolidated them into the right type of loans. These were two very simple steps that would have saved her thousands of dollars. Now she is starting over and won’t qualify for forgiveness in another 10 years because her balances will be paid in full at that time.
|J. Scott Applewhite / AP|
If all of this information isn’t enough to make you really look at your student loans to ensure you are not taken advantage of, maybe the astonishing news that the Education Department is blocking Student Loan oversight will help: https://one.npr.org/?sharedMediaId=723568597:723878830.
One thing we know for sure, millions of graduates are suffering from high student loan payments and are being taken advantage of by their lenders and the government isn’t doing anything about it.
If you want to take control of your debt, contact Degrees of Success to get real help from someone who is on your side, not the side of the lenders and corrupt government officials. They will ensure you are in the correct payment plan and your loans qualify to receive forgiveness. Don’t let it up to chance hoping your servicing company has your back.
Genevieve Dobson, MBA
Degrees of Success Founder
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