Kiarra has three student loans – one is private and two are federal. She’s had the loans for nearly a decade and, though she started making payments, she went into default because her income didn’t cover the payments. She filed for bankruptcy and now she’s got to start making payments on the loans again.
She began her federal student loan consolidation online at www.StudentLoans.gov and worries that she may not be approved. But her biggest concern is the adjustable rate private loan, held by EDMC Discount.
With no college degree and no financial ability to go back to complete her education, Kiarra is depressed and confused about her options.
Listen in to hear my advice on how to handle her private student loan payments.
Are Student Loan Defaults Going Down?
According to recent reports, student loan defaults are on the decline. But look a little deeper and you’ll see that the default rate is actually higher now than it was last year.
About 593,000 former college students out of 5.2 million total borrowers defaulted on their federal debt as of Sept. 30, 2015, according to the US Department of Education. Default rates at public and for-profit colleges dipped, while private, nonprofit schools experienced a slight increase.
Data analyzed by researchers at the Federal Reserve Bank of New York and the Treasury Department suggest that student loan defaults within the first three years of repayment account for only about half the total number of eventual defaults. In fact, more than twice as many borrowers who entered repayment in 2009 had defaulted by their fifth year than by their third year, according to research published last year by the Brookings Institution.
- Student Loan Default Rates Continue To Drop (Fox Business)
- Student Loan Default Rates Decline, But A Record Number Of Borrowers Are In Default (Consumerist)
- Official Cohort Default Rates for Schools (US Department of Education)
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