Student Loan Consolidation

Paying for college is one of the largest investments people will make in their lifetime. Depending on the type of degree, you can spend the next decade or longer paying it off. It almost seems as if the cost of a college education goes up every single year. With that rising price comes more difficulty and people who cannot afford their student loans.

Despite the massive expense, there are a number of ways that the poorest Americans can get assistance. There scholarships, grants, and financial aid, as well as federal student loans. But it’s not just tuition that’s expensive. Books and other needs are becoming more expensive as well. You never have to expect to pay hundreds of dollars for a single textbook, yet that’s what they cost.

There are other things as well, like housing, food, and transportation. Short of working a full-time job as well as taking a full load of classes, it can be an expensive time. To bridge the gap, a lot of people take out private loans. These are loans that are there when you need them, but can have significant drawbacks if you’re not careful.

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Private vs. Federal Student Loans

There are two different types of loans you can get to help pay for college. The first is a federal loan. These are loans that are issued through the United States Department of Education. These types of loans are the most popular as they have some backing by the federal government. To receive a federal loan, you have to fill out a FAFSA application every year.

Private loans are offered through banks and other individual private financial institutions. The difference between the two can be how they’re issued. For example, to get a federal student loan you don’t need to have a top credit score. Interest rates and fees are all set by the government and can change from year-to-year. Private loans are different.

“Private loans are simply loans from private lenders — such as banks — that can be used to pay educational expenses,” says Ryan W. McMaken, communications director and economist for the Mises Institute.

And because private student loans require a good credit score, most young people would need to get a cosigner. There are different requirements for each institution, the private student loans do not get automatically issued like federal loans. If you don’t get a cosigner, you most likely won’t get a private loan.

The Pros and Cons of a Private Student Loan

Let’s start with the advantages. You may need to pull out a private student loan if you hit the cap for federal student loans. There’s only so much you can take out each year in a federal loan. So, if you need more money, you have the option to get a private loan to fill in the costs. Interest rates are also typically lower as well.

“Many (students) take out private student loans when they will still struggle to pay their tuition even after federal student loans,” says Leslie Tayne, debt resolution attorney, best-selling author and founder of Tayne Law Group.

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There are several cons with private student loans. Because good credit is required, that means someone will most likely have to cosign for you. That can put the person in risk, especially if you have a lot of debt to pay off. If you default or can’t pay back your student loans, it’s going to hurt the person who helped you.

Even if you can swing a loan without help, unless you have a perfect credit score, you will be slammed with high interest. It’s hard to get qualified through without stable income and decent credit history. That means your interest rate will likely be in the double digits and higher than federal borrowers.

Also, unlike federal borrowers, there are no forgiveness or repayment plans to help out. Your private loan is not protected by the government.

A few days ago, the Federal Reserve revealed that student loan debt has been hurting the national homeownership rate. This is a new problem, as the homeownership rate has been dropping considerably since 2005. A lot of this has to do with the lack of young people buying homes. This correlates with the amount of student loan debt that they have.

A lot of it has to do with the great recession. Millennials saw what their parents had to deal with. Many Americans were near to having their homes foreclosed upon. As this generation grew up over the last decade, they developed little faith in the housing market. They don’t see homeownership as the investment our parents and grandparents did.

And still, a major part of this student loan debt. When you have $50,000 worth of debt, you’d be hard-pressed to get accepted for a mortgage. We reported previously that as many as 400,000 young adults were unable to buy a home. That’s because of the mountain of student loan debt in their possession.

It can take a decade or longer to pay off that much debt. As student debt continues to spike, homeownership rates have fallen. The average student loan debt per capita among 24-34-year-olds has doubled. Yet, the percentage of adults in that same age range who owns a home has fallen steeply from 45% to 36%.

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The Burden of Student Loan Debt

Because more people are spending more money on student loan debt, it’s having economic repercussions across the spectrum. The Fed is beginning to report on an increasing number of economic challenges as a result of this problem. When you’re spending your money on debt, you don’t have anything extra.

“We estimate that roughly 20 percent of the decline in homeownership among young adults can be attributed to their increased student loan debts since 2005,” said report authors Alvaro Mezza, Daniel Ringo, and Kamila Sommer of the Federal Reserve.

The report also revealed that every $1,000 the cost of education goes up, there’s a 1%-2% drop in their likelihood of owning a home. That’s a major problem. Maryland Senator Chris Van Hollen is one lawmaker constantly speaking out against this crisis.

“Student loans impair their financial mobility — often preventing them from buying a home or putting away savings,” said Van Hollen.

More than Just Debt

The student loan debt problem goes way beyond just being a vacuum, sucking up every last dollar. No, it also pushes down credit scores. A lower credit score will prevent anyone from buying a home, leasing a vehicle, and more.

According to the Fed report: “Increased student loan debt causes borrowers to be more likely to default on their student loan debt, which has a major adverse effect on their credit scores, thereby impacting their ability to qualify for a mortgage.”

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“We must address this growing problem,” Van Hollen said. “That’s why I support efforts to allow students to refinance their loans to lower rates, improve implementation of the Public Service Loan Forgiveness program, and increase the Pell grant to cover more college costs.”

This is a major crisis that will only continue to grow. Colleges do not seem to care about the rising cost of an education. Lawmakers seem to only pretend to be concerned. Regardless of which party is in power, very little is done to combat the problem. Until someone steps up, student loan debt will continue to cripple the economy.

If you’re a government worker, you’re probably a bit worried right now. As we currently wade through the longest government shutdown in history, there are no answers in sight. As another day comes in goes, government workers remain unsure how they’re going pay their bills. Rent, utilities, and even their student loan debt payments are in limbo.

We’ve rallied on here many times at Financial Helpers about making your monthly payments on time. Becoming delinquent on your student loan debt is a dangerous game you don’t want to play. As a service worker and federal employee, that’s even truer. You have to stick to the plan to receive full student loan forgiveness.

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But, when do you do when the government shuts down, a situation completely outside of your control? It’s understandable that you’re going to fall behind on your payments, but there are other things you can do. Here are three steps you can take to show you’re trying to remain current on your student loan debt:

Step One: Remain Proactive about Your Student Loan Debt

Your student loan servicer has millions of people like you they’re trying to keep track of. You know your situation, but they may not. Do not just assume they know you’re a government worker. There are a number of mortgage, credit card, and student loan debt companies out there right now offering relief assistance.

By not saying anything and ignoring the situation, you could be setting yourself up for disaster. Always keep in touch with your servicer and relay any financial hardship you might be facing. More often than not, they will do what they can to help you. By not being proactive, your servicer probably won’t know about your situation.

Step Two: Review Your Federal Student Loan Options for Repayment

This goes along with step one. You have to remain proactive! Most people with student loan debt have the option of filing for a deferment or forbearance. There are several types of programs that can allow you to push off payments for a few months. To find the right one, you have to stay in contact with her servicer.

These options will give you a much-needed break from making student loan debt payments while furloughed. Still, this might not be the best option for you. While monthly payments are put off a few months, interest can still continue to pile on. That means even while furloughed, your total amount due can still continue to grow.

Step Three: Consider Other Repayment Options

It’s understandable that you’d rather put off making payments until your paychecks start coming back. You have other bills to pay that are more important to your survival. But, if you can swing it, the best option may be to continue making payments towards your student loan debt.

So, while going into deferment or forbearance might seem like a good idea, there are better options. Especially if you’re working towards Public Service Loan Forgiveness. A forbearance would not meet making qualified payments, so it would extend what you have to pay. You may find the benefits of an income-driven repayment plan better suited to your needs.

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You might even find a bank or credit union that offers interest-free loans that can help in an emergency. This loan would help fill in the gaps while you wait for the government to reopen. Yes, that means you’d have another loan to pay. But, since you’ll be getting back pay, you can use that money to pay back the loan.

Either way, call your servicer and discuss all options open to you! That’s the best course of action during this trying time.

Americans suffering under their student loan debt could be about to lose a major tax break. Currently, you can deduct up to $2,500 in student loan interest from your taxes. This has provided some help to former students digging their way out of the crisis. Sadly, this deductible could be on its way out the door if Republicans get their way.

There are 12.2 million U.S. taxpayers who took advantage of this deduction in 2015. Education advocates are frustrated by the move, saying they believe it will just make the cost of college that much more expensive. On the other hand, Republicans defended their bill claiming the loss will be offset by other benefits in the bill.

The American Council of Education is fighting back. They wrote a letter to the House Ways and Means Committee. This is the group responsible for writing the tax laws.

“It is possible to offer tax relief to hard-working middle-class and lower-income Americans in a way that does not increase college costs and does not make a quality higher education less accessible,” ACE President Ted Mitchell wrote in the letter Monday. “We are eager to work with Congress to enact such legislation, but this bill heads in the wrong direction.”

Justin Draeger, the president of the National Association of Student Financial Aid Administrators, agrees. “It’s going to make student loan borrowing more expensive and as a consequence make higher education more expensive,” he said. The Republicans don’t agree with this sentiment.

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Cutting Taxes for Everyone?

The Republicans aren’t taking the opposition of their bill lightly. In fact, they don’t think the $2,500 student loan interest deductible did much at all. While that seems like a big number, the average tax reduction was just $200. Jason Delisle, a conservative who works for the American Enterprise Institute, says the tax bill will help.

“So, if you thought that the student loan interest deduction was good, this bill gives it to everybody and then some,” said Delisle. “They are cutting people’s taxes.” This bill is looking to double the standard deduction to $12,000 for individuals. Couples would receive a $24,000 deduction.

Student Loan Debt a Growing Problem

Student loan debt has skyrocketed in the past decade. Over 44 million Americans owe $1.53 trillion worth of debt. People everywhere are begging the government for some help. This amount of debt ranks #2 compared to all other types. Only mortgage debt is higher. With so many people struggling, this is a crisis that will soon impact the economy.

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Many experts already are blaming millennials for harming the economy. They’re broke thanks to high amounts of student loan debt, so it’s forcing them to put off major life decision. Any kind of break the government can give them in the form of tax relief will be beneficial. Short of working in a service-related industry, there is very little help out there.

The day you graduate college will forever be a memory you’ll never forget. But for a lot of students, a new challenge begins. Whether you were in school for only two years or ten, it’s time to start paying back your student loan debt. And that’s easier said than done. Most people struggle with this, even if they got a good job right after.

Depending on the job market, you probably won’t get a great job right after. And if you do, there’s a lot of ladder steps to climb before you get to your desired salary. Life after college isn’t easy. Just tell the millions of people who went to college during the decade-long recession. Many graduates were stuck working fast food because that’s the only work they could get.

Regardless of your job situation, your first month of student loan debt payments begin in a few months. Whether you’re ready for it or not. Are you settled into your new place? Do you have transportation? Can you afford health insurance? None of those questions matter to your debtors. You owe them money and it’s time to pay them back.

So, what is your first step? Perhaps you have a lot of expectations about life after college. This includes people who have long graduated but still don’t have your bearings yet. You can attest to the unique challenges that happen to college grads with mounds of student loan debt. The worst part is, this mountain of debt will forever follow you around.

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The Student Loan Debt Crisis

Here is the grim reality for those with student loan debt: 72% of graduates from the Class of 2017 owe on average $37,000. That can take a decade or longer to fully pay off if meeting minimum payments. This is never a great way to start adulthood. It’s forcing former students to delay major life decisions while they figure it out.

If you have student loan debt or are about to graduate this year, you need a plan. You have to figure out a way to keep your budget intact. That might mean living on as little as possible while pumping every extra dollar you have into your debt. That’s the only way to become free of it sooner rather than later.

Here are ways you can budget your money properly to conquer your student loan debt:

1) Create a Budget

This might seem like an obvious step, but you’d be amazed by the number of people who don’t budget. What they can’t afford on their own, they just grab with credit and worry about it later. Getting caught in this trap is the worst thing you can do. Paying back hundreds per month towards your student loan debt won’t give you much extra money.

Making payments towards credit purchases, including interest, is the wrong choice. Yet, this is what a lot of people do. If this sounds like you, it’s time for a bit of financial discipline. Put yourself on a budget. Sit down with your books and plan out the next months and years in advance. Determine what you need for food and other essentials and go from there.

2) Live Like You’re Back in College

Once you’ve created a budget, you’ll get a larger picture of where you’re at. But there are still financial decisions you might not be thinking of in your mid-20s, like retirement. Many people with student loan debt don’t have enough extra money to worry about retirement or a rainy-day fund.

That’s because they’re so busy trying to live it up. They have expensive cable packages, brand new cars, and grab the latest model smartphone each year. Of course, this doesn’t describe every young adult. Many have started a family and live paycheck-to-paycheck. Yet, despite this, there are things we can cut out of our budget.

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In the short term, consider living like you’re still in college. Share the rent and utilities with roommates. Eat cheaply. Get Netflix and Hulu instead of expensive cable. Carpool and use public transportation. Cut costs wherever you can. If you pour every available dollar you have into your student loan debt, you can pay it off in a few short years.

Once your debt is paid off, you will be financially free! Your credit score will be dramatically improved and life outside of college can begin.

High amounts of student debt don’t just plague the young. No, more than 44 million Americans are buckling under the burden of over $1.5 trillion. Many people who graduate can spend the next 10-20 years paying it all off. It can be nearly as expensive as leasing an expensive luxury vehicle with high payments and interest.

It wasn’t too long ago that we shared some quotes from Shark Tank’s Kevin O’Leary. He talked about doing whatever you can to get rid of your student debt as soon as possible. That means waiting to spend your money on other things until that debt is paid down. If you can live frugally and pump extra money into the loan, you’ll be set.

Call Now 844-332-2079There are other strategies as well. Here are 7 steps for paying off your student debt faster:

1) Pay Extra as Often as You Can

This one might sting a little bit. One of the biggest mistakes people make is only paying the minimum balance. But it’s like with your credit card. If you make the minimum balance, you’re only putting minimum effort into it. That gives interest and other charges a chance to catch up. If you’re only putting a little money towards the principal, how do you get ahead of it?

That doesn’t mean you have to pay extra every month. But it does mean you should consider paying more whenever you get the opportunity. For example, put off that expensive vacation. Don’t waste your tax return money. Buy a beater for a car. All that money should go towards your student debt. When it’s paid off, you’ll have all the financial freedom you can handle.

2) Make Two Payments

There’s a certain trick that can help you pay off more of your student debt. It might seem strange at first, but it works. If you owe $400 per month, pay $200 around the 15th and $200 on the 30th. You might think the math is off, but by doing it this way, you actually make 13 whole payments in a year. That gives you an extra month you paid off!

3) Don’t Forget Auto-Pay

This might seem like it won’t help too much, but it can! The biggest part of the process is ensuring you tackle your student debt every month. People sometimes forget, become delinquent, and it works against them. By setting up auto-pay, it’s automatically deducted. And some lenders might even give you a discount for setting it up.

4) Refinance Your Loans

This can be a big one down the road! When you first start out going to college, you don’t have a track record of steady work and good credit. That hurts you. But, over time, you will be able to prove a good work history and improve your credit. Refinancing your student debt is always a great idea!

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By refinancing, you’re taking out a new loan to pay for the old that. Because your credit has improved, your new loan will come with a much better interest rate and lower payments. It makes making payments a whole lot easier!

5) Does Your Company Offer Repayment Assistance?

There are a lot of companies out there that do what they can to recruit the best talent. They offer 401(k) and profit-sharing incentives. These days, many companies are realizing the burden of student debt and offer repayment assistance. It doesn’t hurt to ask!

6) Volunteer Your Time

There are companies out there, like SponsorChange, who loves helping others. In exchange for volunteer, non-profit work, they offer student loan repayment. These are companies that could use your skills. Once each project is completed, they will offer payments towards your student debt. It’s a great way to support a cause you’re passionate about and pay down debt.

7) Create a Plan

This is super important. If you watch Dave Ramsey, you know he has had a lot of success helping others get rid of their debt. How does it do it? He puts them on a plan. That plan might include some of the things listed in this article. It will require frugal living until the student debt is paid off.

If you don’t pay off your student debt quickly, it will encroach your life in every way. It will prevent you from buying a house, a car, saving money for retirement, and more. The quicker you get it out of the way, the better!

A new paper from the Federal Reserve has revealed that there’s been a 20% drop in homeownership among young people. Normally, the end of college signifies the start of a new career. That career often leads to homeownership and maybe even the start of a family. But, things aren’t the same as they were just a decade ago. Student loan debt is to blame.

The Federal Reserve is finding that the $1.5 trillion worth of student loan debt is changing the economy. And not for the better. As the next generation goes through high school, we’re seeing the last of the millennials make their way through. Perhaps no other generation has had it as difficult as them.

The Great Recession has stunted their economic growth for the last decade. A lot of colleges made big promises to lure in the most vulnerable. They said they had incredible job placement rates. So, people bought in, signed the dotted line, and grated four years later. Instead of the job they were promised, they got buried in student loan debt.

The thing about student loan is, it doesn’t go away. If you don’t have a job or find yourself struggling, it doesn’t matter. The payment is still due every month. With no extra money, young adults are finding it nearly impossible to invest in the future. They’re not saving for retirement, buying health insurance, or a home for their growing family.

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How Is Student Loan Debt Impacting Home Ownership?

This new study by the Federal Reserve shows just how much student loan debt is hurting young adults. Homeownership rates fell 9% over the last decade. That might not seem a lot, but it’s a major hit to the economy. It equals about 400,000 potential homeowners who wanted to buy a home but couldn’t. And the Fed blames student loan debt as the culprit.

“We’re still selling people on the idea that higher education, no matter its cost and no matter the level of debt, is the ticket to a better more stable, more healthy life,” said Julie Margetta Morgan, a fellow at the Roosevelt Institute. “For many people, that’s not the case.”

This study is yet another revelation about how much student loan debt is impacting young adults today. It’s not just the housing market, but every other financial aspect of their life. For example, millennials are waiting longer to get married and have children. They are living at home longer. They’re also defaulting on their debt at a much higher rate than any other generation.

Millennials also have little-to-no savings. It was recently revealed that the majority of young people don’t have access to even $400 to pay for an emergency. And as previously stated, they’re not saving for retirement. Life is an all-around struggle for them.

The Economic Winds of Change

Bubbling up to the surface from this student loan debt crisis are new financial goals and practices. Never before in American history has there been such a change. Socialist ideas are becoming the new norm. We saw this in the 2018 midterms as new, upcoming stars were elected into office, most of them with socialist ideals.

They have their own ideas about paying off the student loan debt. But this isn’t the only change how America sees the future. Unlike previous generations, millennials do not view home ownership as a worthy investment. A lot of that has to do with watching their parents go into foreclosure during the Great Recession.

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Furthermore, millennials are more likely to group together in cities where the cost of rent is astronomical. Consider New York and Los Angeles. Who can afford a home in these cities besides the super-rich? Instead, if they’re not living at home, they’re grouping together and sharing the rent. It’s not worth it to buy a home in an expensive market with a limited income.

It would certainly seem as if the American Dream is coming to an end. Or, at the very least, the idea of the American dream is rapidly evolving. Student loan debt is at the very center of this debate. Hopefully, opportunities will continue to grow as the economy improves

Beer and college often have a way of ending up together. Mini-coolers, frat-house parties, and so much more. Beer is apart of Americana. In America, when people are hurting, we often step up to the plate. That’s what one beer company is doing, offer millions in student loan relief. You might have a shot at winning your cut of the prize!

Natural Lite, owned by Anheuser-Busch, wants to help bring student loan relief to the masses. They look out and see many millions of people suffering under the burden of their debt. The average student leaves college $37,000 in the hole. That’s a lot of money that can often take decades to fully pay off.

This program isn’t a new one. In fact, it’s Anheuser-Busch resurrecting their College Debt Relief Program. This was a contest they ran last year, giving $1 million to a handful of Natural Light drinkers. Natural Light first ran this contest as a way of allowing people to “remember college for the good times.”

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How to Win Student Loan Relief Prize

Natural Light is doing this year’s contest a little different. They want fans of the beer to create a fun video and post it on social media with the right hashtags. The videos must be with the beer and showing a fun and spontaneous lifestyle. They will then score each video. 70 people are slated to win some prize, between $10,000 and $40,000.

That’s not all! Natural Light wants to offer more student loan relief. They want people to be able to enjoy Super Bowl Sunday, regardless of how much debt they have. So, they’re going to give 151 drinkers of their beer $351. That’s the average monthly student loan payment. Rather than sacrificing to pay the debt, Natural Light wants those people to party.

Student loan debt has hit $1.5 trillion dollars. Natural Light is tapping into the anxiety caused. This is why they’re offering student loan relief to many of their fans. Most people suffering under this burden are young adults, so this is a great way to advertise. Millennials have been taking the brunt of the ordeal.

Good Press

Of course, Natural Light is trying to seek good press from this contest. They aren’t the only ones taking advantage of this crisis. A few months ago, we reported the start of a new game show that offered student loan relief as a prize. If you won, your debt would be paid for. Many companies are also starting to offer benefits that include loan repayment.

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While it seems these companies are willing to help for a little good press, the government still owns this. Still, they refuse to help solve this crisis. In fact, they even appear to be working against the interests of millions of suffering Americans. The federal government owns it all and could offer student loan relief if they wanted. They clearly don’t.

Soon, this debt is going to massively and negatively impact the economy. At some point, they will be forced to stand up and help the people. We’re still holding onto hope and we’ll break it to you when it happens.

As we enter the new year, student loan debt continues to climb at a rapid pace. Last month, this debt hit the record of $1.465 trillion. The reason why this type of debt continues to grow is because borrowers are having a difficult time. They don’t know how to pay back so much student loan debt. There are so many fiscal risks that come along with it.

It’s difficult to imagine how hard life would be to have that much debt in the middle of an economic crisis. Yet, that’s what millions of Americans went through over the last decade. Since June 2009, student loan debt has doubled. It was a paltry $675 billion. That is a lot of money, but nothing compared to what it is today.

“Over 90% of student loans are guaranteed by the U.S. Department of Education. Meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,” said Paul Della Guardia, an economist at the Institute of International Finance in emailed comments.

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The Student Loan Debt Crisis

The hardest hit time for the student loan debt crisis was 2012. Loans handed out on this year defaulted at a much faster rate than any other year. According to Bloomberg analysis, this is the year when students had a more difficult time making monthly payments. This is compared to students who receive similar loans either before or after 2012.

These loans were taken out by young adults between the ages of 24 and 33. This is that age when adults are trying to establish their lives and their careers. To try to start families and build a home. Yet, when this age group graduated college, the unemployment rate was twice as high it is right now.

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This meant that so many Americans graduated from college with a twinkle in their eye, but couldn’t find any work. There student loan debt kicked in and they couldn’t afford it. The Bureau of Labor Statistics indicates that it took this group 3 times longer to find a job. The problem is, 2012 only marked the beginning of the crisis.

A Continuing Dilemma

While the job crisis appears to be over, the student loan debt problem continues. You had about a decade where not only jobs were scarce, but interest rates continue to climb. In fact, the current interest rate is 100 basis points higher than in 2012. This means that the people couldn’t afford their debt now have even more to pay.

There are 2.7 million student loan debt borrowers out there who owe over $100,000. That’s a lot of money! That’s a house mortgage. Having that much debt makes it nearly impossible to get a loan. And with increasing interest rates, is nearly impossible to get out from underneath it. This is a crisis that continues to grow with no relief in sight.

No one takes out student loan debt expecting they’ll have trouble paying it later. In fact, most borrowers go into college expecting a good job to come out of it. You put in all that hard work, and then what? Sometimes, plans don’t work out as intended. Life gets in the way, as well as the economy and other factors.

Currently, 44 million Americans owe over $1.53 trillion worth of student loan debt. That’s the second highest debt out there today. The worst part is, the debt keeps piling up. Every year, more than one million students go into default when they can’t pay. To go into default, you have to miss over a year’s worth of payments.

Going into default is a nightmare for anyone with student loan debt. Even though you’re not paying, the interest continues to climb. That means the total you owe grows with each passing month. Not to mention, your credit takes a massive hit. If you had hoped to buy a house or get a new auto loan, think again. Going into default cancels all of that out.

If you think bankruptcy is the answer to solving your student loan debt problem, think again. Only in extremely rare circumstances will it be discharged for that reason. This is one debt that if you owe, you’ll have to pay it back regardless of your circumstances. But, there is one option that might help you.

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Can You Settle Student Loan Debt?

While bankruptcy and other sorts probably won’t happen, you can settle your student loan debt. A word of warning: we are not saying to do this. We’re writing this article as a last-ditch possibility that may not even happen. So, what does it mean to settle your debt with the lender? It’s really about negotiation.

If you’re way over your head and deep into default, you may find that your lender is willing to talk. If it becomes obvious that you’re not going to pay your bill, the lender may decide to settle. To settle your student loan debt means that you can reach an agreement with the lender to take less than the full amount.

Lenders might get desperate to get some of the money back. This isn’t the same as student loan forgiveness or loan discharge. This is a unique and special deal the borrower and lender will make to get the student loan debt discharged. There are a few incidences of president where this has happened before.

Typically, the debt has to be in default. If you’re paying on your student loan debt, then the lender has no reason to do this. They’re getting their money back with interest. If you’re not paying and you’re deep into default, that’s a different story. They will do what they can to get you to start paying again.
“If you’re making payments on your loan, and everything is in good standing, you’re not going to be able to just call your loan servicer up and say, ‘Hey, will you take 50 percent?'” says Adam S. Minsky, an attorney specializing in student loan debt.

How to Obtain Debt Settlement

The best way to do anything about your student loan debt is to contact your loan servicer. If you’re deep into default, you might think that’s the last thing you want to do. But they hold all the keys and will ultimately make the decision to lower your balance. At the end of the day, going into default and avoiding the problem won’t help you.

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Despite who your servicer is, your loan is owned by the federal government. They have a handful of pretty powerful tools to make sure you pay them back. They can garnish your wages, take your tax return, and more. Your servicer can also pass your loan off to a collection agency and revoke your driver’s license!

It’s never worth it to go into default. If you’re struggling to pay your student loan debt, call the servicer and make a deal. Ask them about a settlement and negotiate it to something you can pay.