The massive rise of costs in the college tuition complicated by a sluggish economy has caused student loan debt to continually rise. Student loan debt is now the second largest source of consumer debt in the USA.
Because of this growing debt bubble and the need for consumers to receive quality help and guidance, a new consulting industry has emerged that takes advantage of the under informed and over burdened consumer. “Student Loan Advisory Consultants are springing up all over the internet trying to lure those that are in greatest need of help into long term consulting contracts that can cost the unsuspecting consumer hundreds of dollars in unneeded expense” says Attorney Dean Porter of the Student Loan Law Group . “Most people can consolidate their loans on their own and do not need to pay someone to help them” Porter continues.
“However, if you do have a serious problem and need qualified representation, I strongly advise a consumer to contact an attorney who practices in area of the Student Loan Law. Usually, a brief consultation can clear up any confusing questions a consumer may have and put them on the correct path for student loan relief” Porter explains.
There are various types of Student Loan Relief available for those
with federal loans. The most basic
relief is the Standard Loan Consolidation.
A Standard Consolidation combines all of the qualified loans into one
monthly payment and standardizes the interest rates for all of the loans. These loans are usually paid off in 10 years. There is a modified version of this
consolidation called the Graduated Consolidation. This allows a borrower to pay less at the
beginning of the 10 years and more toward the end on the monthly payment. Borrowers with high loan balances can also
extend these programs up to 25 years in repayment term. This helps to lower the monthly payment by
spreading it out over a longer term.
There are three main type of income based programs 1) Pay as
you Earn, 2) Income Based Repayment (IBR) Plan and 3) the Income Contingence
Repayment (ICR) Payment plan. These
plans each allocated a portion of your discretionary income to repayment based
on a schedule determined by the Department of Education. Not all loans qualify for these programs and
it is recommended that you consult
with a qualified representative before applying for these programs. Most of these programs require continual
recertification and compliance. If you
are successful in completing these 25 year programs, large portions of your
debt may be completely forgiven.
However, it is very important to comply with the conditions of the
repayment plans or the time element may not be satisfied.
Other forms of relief can be in the form of release of garnishment,
defense against abusive collection practices or disability discharge.
There are also special Public Service Forgiveness Plans for
qualified public service professionals.
Under these plans, after 10 years of continual repayment the remainder
of your debt may be forgiven. Again,
these plans carry very specific guidelines that must be complied with to
receive the forgiveness. Therefore, it is highly advisable to find qualified
representation to assist you with these programs rather than a nameless face on
the Internet.
