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Private Student Loans: Tacked on Top of Federal Loans, Hiking up Monthly Payments

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If you are a student loan borrower in the US, chances are at times you have considered whether taking out so much money for education was a good idea. Most of us have had that thought when forced to write out the check!

From technical schools to four-year undergraduate schools, to graduate schools and more—over 45 million borrowers in the United States have created a cumulative debt of over $1.6 trillion. Now developed into a full-blown crisis, the student loan debt weighs heavily on all of us, and the economy as well. With so many 20- to 30-year-old borrowers strapped down with payments of almost $400 a month on the average, budgets are constrained and that trickles down to construction companies that are not building as many first-time homes, cars that are not being sold, nice meals that are not being taken at restaurants, and many more large ticket items that are not being purchased because borrowers are too busy paying off student loan servicers.

Piecing together the student loan can be challenging, but most rising students and borrowers do have at least minimal advice and counseling from guidance counselors and financial aid offices. While the amount of counseling anyone receives regarding taking out large amounts of money is dubious today, students are directed as to how to find funds, and when federal funds run out, how to begin applying for private student loans. The problem with private student loans tacked onto federal loans is that not only are individuals borrowing more, but they are much more vulnerable in the case of a default. In that event, borrowers must worry about both the federal government coming after them and a private student loan servicer. This could be extremely stressful if you are being sued or are watching your tax refund be intercepted by the IRS.

“Unfortunately, those who take out loans often overestimate their incomes after graduation,” says Ryan W. McMaken, communications director and economist for the Mises Institute, a free-market educational institution, in a recent news interview. “This can lead to a number of problems down the line.”

“If a borrower becomes delinquent with private loans, there may be fewer options than when a government loan borrower is delinquent,” McMaken says. “This can lead to the borrower’s credit being dinged or destroyed more quickly than might be the case with government loans.”

Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at

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