Student loan debt continues to be a problem nationally, as the total owed exceeds $1 trillion. Although private loans are also a problem, the good news is that they make up only 15% of the total debt, and federal loans still dominate the landscape. The amount of debt per student (and in many cases the parents) has led to real problems with affordability of the monthly payments and defaulted loans.
These people have either given up, and let the loans default, thus facing wage garnishment and the loss of their federal tax refunds for the foreseeable future, or are hiding out in a deferment or forbearance, hoping that their financial future will somehow get better and allow them to make the payments. Still others file chapter 13 bankruptcies to prevent the entry of default by forcing the loans into a forbearance while making a small monthly payment for three to five years.
None of these are the optimal solution, especially as there are many offered by the U.S. Department of Education that allow you to get out of default (if you are) and get into a monthly payment that is affordable at your income level. So in this episode of the podcast I talk about what those solutions are and how they can help.