Law Office of Stephen M. Stern, PLC

With the ever-increasing cost of tuition, room and board, more and more students are dependent on loans to pay for their education. More than 39 million borrowers hold approximately $1 trillion in debt since 2014, and that number has likely increased dramatically. In addition to the students taking out student loans, their Parents may be assuming Parent Plus Federal Loans, and/ or the Grandparents, who co-sign private loans. Students remain hopeful that their investment will result in higher paying jobs to pay for the loans, but salaries don’t necessarily keep up with the loan amounts needed to fund the education. Depending on the chosen career and the economy, employment and income can change radically, presenting significant challenges to stay current on student loan payments along with other debts. Failure to make these payments will result in default, followed by garnishments of your paycheck, interception of tax refunds and more by the federal government, which does not need to file a lawsuit or get a judgment. Private loan creditors may file a lawsuit, and then seek post judgment remedies such as garnishments, bank levies and more.

There may be several options available to you to deal with these financial challenges. This includes the possibility of placing you in an income based plan that limits your payment to 10 to 15% of your income, while also starting the time clock on the number of payments you need to pay before the remainder is forgiven.