What would you say if you found out the government has made billions of dollars in the last few years from student loan interest payments? It is safe to assume that some of you would think “Naturally, student loan lending is a financial transaction that includes interest in repayment.”, while others would think “With all those suffering under crippling payments? That is outrageous!”, and you would both be right.
A recent study revealed that the federal student loan lending program has made $66 billion since 2007, and estimates another $185 billion in the next ten years. Some have called it disgraceful and obscene, while others haven’t batted an eye. Where the trouble lies isn’t in the details of the governments profit, but the bigger picture of the problems the entire industry faces.
Consider This
College was once an activity for the elite, over time evolving into a very real life stage for the majority of Americans. However, with the cost of college tuition rising each year, the ability for some college hopefuls is being beyond their financial reach. Essentially, we are back to square one; only the rich can afford college. But the student loan industry has come along hoping to change that, and it has, but at what cost.
It is said that college graduates leaves the ceremony floor with two things: a diploma and a debt burden. The average student loan debt balance at graduation is upwards of $25,000 with a minimum 5% interest rate. Assuming that graduate can secure a moderate income of $35,000 a year, their monthly payments could be as low as $120 a month taking them 40 years to repay! Take the same graduate salary and debt balance and increase the payment to $250, likely too high for the salary base, and they will be paying for the next 11 years.
Without getting bogged down in the math the bottom line is simple: too many college bound kids lack reasonable options for financing their education, borrowers are being put on the brink of financial hardship trying to keep up with their payments under moderate salary levels, and the student loan lenders are tough creditors that don’t give a lot of wiggle room.
There is help. Student loan lawyers can help negotiate debt balances down, find affordable repayment options and work to get you back in the financial control.