Student Loans are Defaulting at Higher Rates than Previously Thought
An article in the Washington Post on March 14, 2017 reported the number of people defaulting on their student loans has skyrocketed in the past year. Reporting on a study conducted by The Consumer Federation of America (CFA), the Post indicated that millions of people had not made a payment on $137 billion in federal student loans for at least nine months in 2016, a fourteen percent increase over the number in 2015. Additionally, tens of thousands of people are defaulting for a second time. In preparing the report, the CFA analyzed data obtained from the U.S. Department of Education, which manages $1.3 trillion in federal student debt owed by 42.4 million Americans. Nearly half of the debt in default is attributable to a bank-based federal lending program known as the Federal Family Education Loan Program. These loan programs have since been retired.
In a subsequent article on March 17, 2017, the Post quoted a CFA official who indicated that more than three thousand Americans default on student loan debt every day. Federally subsidized student loans can be collected by the government and the collection companies with which the government contracts by seizing tax refunds, garnishing a portion of wages, Social Security benefits and disability income. Income based programs administered by the Department of Education may provide relief to struggling borrowers. In more extreme cases, a bankruptcy (either Chapter 13 or Chapter 7) may be necessary.
This law firm has the resources to assist persons struggling with repaying student loan debt, a nation-wide problem that continues to grow. To learn more about your options, read our April 25 blog post or contact Tom Gilman at 316-267-2000.