As a financial counselor specializing in student loan debt since 2008, April Sanderson of Lutheran Social Service said that as the economy has worsened, the number of people she's helped with student loan problems has increased.
But it's not just the economy that's caused that rise, Sanderson said; it's also the increase in tuition and college expenses.
"Students are having to take out more loans, usually having to max out their federal loans and having to take out private loans in addition to using credit cards," she said. "Once that all comes due, they're often not in a position to afford the payments."
Sanderson said there is help for people with high student loan debt, depending on the type of loan you have. If it's a private loan, then borrowers are at the mercy of the lender.
"There's no regulation; they don't have set standards," she said. "There's no guarantee that they can or will help."
But federal or state loans often can be deferred with proof of financial hardship, Sanderson said, while some programs offer forgiveness if the borrower works in community service.
If borrowers are considering consolidation, Sanderson warns not to combine private with federal and state loans.
"If you do that, they all become private," she said.
She also recommends reading the fine print before you sign any loan consolidation papers to make sure you understand the interest rates.
But above all, she said, don't ignore your loans, because they won't go away.
"Always talk to your lender and see what options you have," she said. "Even if it's a private lender, there may be something they're willing to do."
No comments:
Post a Comment