STUDENT LOANS: ARE YOU IN THE RIGHT REPAYMENT PLAN?

What most student borrowers don’t know, and what the lenders (banks, servicers, collectors, guarantors, etc.) don’t tell you, is that there are about 11 federal student loan repayment plans to choose from. Several are based on income, others are based on the duration of payment, and there is the highly-desired Public Service Loan Repayment Plan. Discovering the best plan for your particular situation, the sooner the better, can save tens of thousands of dollars in student debt and interest.

There is more than a trillion dollars in student debt with more than 40 percent of student loans in default in the USA. Some of the default stems from the inability to afford the monthly payment based on income, and others from requesting a forbearance and/or consolidation of various student loans. It’s typically during the forbearance and loan consolidation stage where the ignorance is anything but bliss. There’s no incentive for any of the bank’s various representatives to get you into a repayment plan that allows you to pay the minimum amount and, perhaps, discharge whatever amount of student debt you may owe after making a certain number of payments. This may also occur during the rehabilitation negotiation, when the default has transitioned into the government’s garnishes of wages, or intercept of tax returns.

Rather than overpay student debt and interest, consult with a lawyer with knowledge in student loan repayment plans to find the best deal for you!