Delinquent Student Loans
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Today in the United States, the rate of delinquent student loans is at record levels. A weak economy and a slow job market are major factors contributing to this delinquency rate. Every year in the United States approximately 20 million people attend higher learning institutions. Of those, nearly 12 million are borrowing money on an annual basis to help them cover the costs of their education.
Statistics – Federal Reserve Board
According to the Federal Reserve Board, as many as 37 million students have loans that are outstanding. Outstanding loans are estimated to amount to nearly $1 trillion according to statistics recently released. This represents a combination of federal loan debt and private institution loans.
Responsibilities of Loan Holder
With over 37 million student loans outstanding, it’s estimated that delinquent student loans are double that of loans that are in default. Delinquent student loans start with the first time you miss a regular payment. Once you fall into delinquency, the owner of your loan must perform certain actions. They are required to notify you of the delinquency within the first 15 days of a missed payment. This notice needs to be in the form of either a collection letter or a written notice. They must also inform you of your right to consult with a Student Loan Ombudsman.
The longer you stay in delinquency the more intense the notices and collections tactics will become. Should your delinquency exceed 9 months, the loan owner will declare you in default. You should be aware that some guaranty agencies will make available to you, default aversion programs designed to help you avoid this situation.
How You Can Avoid Default
If you think you’ll have problems repaying your student loan, then it’s important to contact your lender to help you make arrangements to work out repayments. Do not avoid contracting them. They are there to help you resolve your situation. Some loan owners will consider postponing payments on your loan, and work with you to explore other ways of getting temporary relief. It’s important to do everything you can to avoid being in default as the consequences of default are very serious for your future financial health.
If you have been served with a student loan lawsuit or you have defaulted on your student loans, contact us at Weston Legal for a free consultation.