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Private Student Loan Debt: Funding an Entire Industry

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We’ve all heard the saying that money makes the world go ‘round, and of course, that is true in nearly every case where there is a price for admission. Sadly, school in the US requires a very high admission price—so much so that young people are often forced to place themselves in dangerous financial positions before they even really get a solid start on life.

Student loans are considered the norm when it comes to going to school these days, however, as tuition continues to skyrocket around the country, so does the need for greater loans. The problem is that they need to be paid back post-graduation, and the borrowers may be barely out of high school with little to no understanding of how to budget for a household and plan for what could be massive monthly payments due to a private loan servicer; in fact, the average amount due each month for a borrower in the 20- to 30-year-old range is a sizeable $400.

Upon delivery of the initial funds to the borrower, however, money is dispersed to numerous different entities riding on the coat-tails of the student who is paying for not only school but also textbooks, living expenses, transportation, and more—which is all very costly—and especially over four years. Without student loans, payments for many of those items would decrease, so while everyone is worried about the student loan debt crisis, the companies reaping the rewards certainly don’t want funding to stop for students.

Even with the financial devastation due to COVID, however, students continue to seek funding, and private student loan servicers continue to lend. Because federal loans have such stringent limits, many students are forced to take on private and federal loans, along with hoping for any possible grants and scholarships too.

Problems may arise in the end though (and this has certainly come to light during the pandemic) if the income expected after graduation does not come through, or if there is sudden unemployment causing income to diminish unexpectedly. While there may be a list of options available in that case for federal student loan borrowers, that is generally not true for private student loan borrowers.

Without much flexibility available if income changes, private student loan services can take much more aggressive measures in trying to collect debts. This is because they are not as regulated and may have a lot of the same power a lender like a mortgage company has. If you are being sued by your private student loan servicer, contact an experienced student loan debt attorney as soon as possible to fend off the potential for issues like default judgments, ending in wage garnishing, seizure of assets, and loss of control over checking accounts.

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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