As the student loan crisis continued to grow even throughout COVID-19, private student loan borrowers were continually left out in the cold. This was especially noted as millions of federal borrowers were allowed relief through September of 2021 through The CARES Act. The cumulative debt continued to escalate for over 45 million borrowers and now stands at around $1.71 trillion—with close to $132 billion of that owed to private student loan servicers.
Recent news shows that companies like digital personal finance company SoFi are now moving ahead to help federal borrowers with programs like refinancing at lower rates, too. For the many private student loan borrowers out there though, substantial help has yet to come, amidst smaller individual deferment programs depending on the sympathy level and generosity of private student loan servicers.
According to Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, ‘the moment may have passed in terms of any real support coming forward for private student loan borrowers or relief from Congress.
“Most people with private student debt also have federal student debt, so [private loan borrowers] probably wouldn’t get anything forgiven,” says Robert Kelchen, associate professor of higher education at Seton Hall University.
Previous to COVID, private student loan borrowers showed a much lower rate of default; however, much has changed financially for the younger generations, especially, many of whom lost their first real jobs as restrictions and shutdowns ensued. Private student loans often tend to be bigger too as they may have been taking out not only to cover what federal loans couldn’t but also for more expensive tuition at Ivy League schools or pricey graduate schools.
A greater concern too over an increase in private student loan defaults is that borrowers might find themselves in hot water during a collection lawsuit. Private student loan servicers have the ability to cause a lot more trouble for errant borrowers, beginning with the option to sue. If you are worried about this type of situation, or if you have already received a summons and complaint, speak to an attorney from Fitzgerald & Campbell, APLC as soon as possible to find out more about your options—and above all, to avoid having a default judgment granted against you.
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 email@example.com.