It is time for a student loan pep talk.
Student loans predictably have a huge impact on the finances of millions of Americans. However, student loans shouldn’t stomp out the hopes and dreams of those who feel they are in over their heads.
Student loans are:
- a contract wherein a borrower agrees to repay a sum of money loaned to them
Student loans are not:
- a life sentence
- a reason not to sleep a night
- a reason to think less of yourself
Giving up is not the answer
Too many people wash their hands of their student loans. They reach the conclusion that no matter what they do, they will never be able to pay off the debt. Faced with certain defeat, they don’t waste their time even trying to do something. They accept that threatening collection calls are a part of life. They accept that a good credit score is something they will never have. And they accept that wage garnishments are a normal part of life.
While there may be a certain calm that comes from accepting this fate, the truth is that it doesn’t have to happen. Student loans do not have to be a nightmare and they do not have to ruin your lives.
In most cases the worst thing you can do is to just ignore your student loans. This allows interest and late fees to build the balance up. Delinquencies and defaults happen. The passage of time makes most problems worse.
Taking back control of your life
A large percentage of the borrowers who fall into default on their student loans are federal borrowers with relatively small balances. Many of these borrowers started school, but did not finish. Anyone who has federal loans can sign up for a repayment plan based upon what they can afford to pay… the total amount they owe doesn’t matter. For many borrowers, that means monthly payments of $0. It also means no collection calls, delinquent debt, or destroyed credit.
Some people talk with their student loan company about lower payments, but these conversation don’t seem to get anywhere. To many borrowers “the lowest monthly payment” is still far more than they can afford. Some collection callers even resort to belittling borrowers and criticizing how they spend their limited funds. Borrowers do not have to accept this treatment. One great way to get back control is to file a complaint with the Consumer Financial Protection Bureau. If your lender is not being reasonable report them to the government. The best part is that lenders are normally required to respond to CFPB complaints. Best of all, these complaints help the CFPB warn others about certain lenders. These complaints have also lead to the CFPB filing lawsuits against the student loan company.
The road back from massive student debt isn’t easy, but it can be done. For many borrowers, $10 extra each month can make a huge difference in debt elimination.
Leveling the playing field
If it seems like the deck is stacked against student loan borrowers, it is because the student loan lenders have been writing the rules for decades. Laws the protect consumers with credit card debt or mortgage debt do not apply to student loans.
These lenders may have the most money, but over 40 million Americans know what it is like to be dealing with student loans. Next time you vote, make sure you are supporting candidates who are working on behalf of borrowers, not lenders.
Dealing with student loans can be brutal.
Regardless of your financial situation, there are steps that can be taken to take control of your student debt issues.
If noting else, remember one thing: student loans are a headache, they are not a personal flaw and they only define you as a person if you let them.