According to recently collected data, nearly one out of every five student loan borrowers has fallen severely behind on their student loan payments. Borrowers are considered delinquent when their payments are late at any point. Borrowers enter into a default status when their student loan accounts have remained delinquent for two-hundred and seventy (270) days or more. Many borrowers do not make efforts to cure their delinquencies or defaults on student loans until they experience the damage first-hand. Most borrowers feel the pain of student loan debt only when they attempt to go back to school and discover that they are ineligible to apply for additional federal student loans or the borrower begins having his or her paychecks, tax returns or Social Security checks garnished.
What many borrowers don’t know is that they have options other than the standard repayment plan that they are automatically placed on at the time the loans are taken out. Standard repayment plans expect the entire student loan debt and interest to be repaid over the course of ten years. These plans do not take the borrower’s personal economic circumstances or income into consideration when determining what the borrower’s monthly student loan payments will be. Many borrowers simply cannot afford these plans.
The federal government has made income-driven repayment plans available to prevent borrowers from receiving unreasonable payments demands and to limit the borrower’s susceptibility to go into default. Income-driven repayment plans formulate monthly payments based on the individual borrower’s income and household size. These plans never charge borrowers more than fifteen percent of their discretionary income and after twenty-five years of successful payments, any remaining student loan debt may be forgiven.
The most prevalent issue with income-driven repayment plans is that the borrowers receive little information from their loan servicers on their options. Borrowers are often completely unaware that they even have repayment options. The loan servicers collecting debt on behalf of the federal government are charged with not only making payment demands, but also counseling the borrowers on their repayment options. Poor communication from loan servicers plays a significant role in today’s high number of student loan delinquencies and defaults. Loan servicers don’t want to help borrowers save money but Student Loan Law Group does. To learn more about income-driven repayment plans, contact the Student Loan Law Group at 888-843-1706 or www.StudentLoanLawGroup.com.
