THE cost of a college education has spiraled out of control for most families. In the last 10 years, student loan debt has sharply risen from $240 billion to $1 trillion dollars. Almost 60 percent of this debt is held by households with less than $8500 in net worth. This makes sense because if these families had sufficient financial resources to send their children to college, they wouldn’t be borrowing so much to begin with, right? Are you or someone you know in this situation?
Unfortunately, a lot of people are not aware of their options in dealing with student loans that they cannot afford to pay back. So in this article, I will discuss the basic information you need to know before you can move on to the next step of finding a resolution.
First of all, you need to know whether your student loans are federal or private. I find that a lot of people are confused and don’t know the answer to that question. Perhaps they have several loans and at the time they got them, they didn’t really know the difference and didn’t really care as long as they got the money they needed to pay for college. But this is an important question for you to answer because depending on the type of student loans you have, the remedies or options will vary. If you can’t answer this question, one way to find out is to go to www.nslds.ed.gov , the Department of Education’s database which lists all federal loans. If it’s not there, it’s most likely a private loan.
The second thing you need to figure out is whether or not you are in current, delinquent or default status. Again, this not only helps you determine which options are available but if for instance you are already in default status, that means that the entire loan amount is now due and the creditor can now take enforced collection action such as a wage garnishment or even take your tax refund (if your loan is a federal loan). If it’s a private loan, the creditor first needs to obtain a court judgment to do any of the above. However, if it’s a federal loan, they can do what’s called an administrative wage garnishment in the absence of a court order although they have to give you 30 days’ notice.
These days, as the awareness grows regarding the severity of the student loan problem nationally, you will see a lot of companies advertising everywhere- on the internet, on TV, on the radio and in the mail- and a lot of them are misleading the public with claims promising “student loan debt forgiveness” or “new government programs to eliminate your student loans”. While yes, there are ways to sometimes eliminate student loans or have them forgiven, it is not as easy as they make it sound. Of course, you can do some research yourself without paying anyone but you can also go hire a debt relief attorney who can review your case and advise regarding legal and non-legal options.
If you need help in making your student loan debt more affordable, call my office at 866-477-7772 to schedule a free confidential consultation. Since 1998, I have represented more than 5,000 clients in bankruptcy. Let me help you get out of debt once and for all. I have offices in Los Angeles, Pasadena, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.