Best Student Loan Refinance Rates
In 1981 a minimum wage earner could work full time in the summer and make almost enough to cover their annual college costs leaving a small amount that they could cobble together from grants loans or work during the school year. 4. In 2005 a student earning minimum wage would have to work the entire year and devote all of that money to the cost of their education to afford 1 year of a public college or university. 5. Now think about this there are approximately 40 million people with student loan debt somewhere over the 1.2 trillion dollar mark. According to studentaid.gov seven million of those borrowers are in default that is roughly 18%. Default is defined as being 270 days delinquent on your student loan payments. Once in default the loan balances increase by 25% and are sent to collections.
With the unemployment rate soaring toward 10 percent and the average starting salary for college graduates down 2.2 percent this year student loan borrowers - whose average debt from student loans tops $22000 - are now having an even tougher time affording their student loan payments. The good news? Starting July 1 2009 graduates with federal college loans may be able to qualify for a new government program that can reduce the monthly payments on their student loans based on their income. Income-Based Repayment for Federal Student Loans The income-based repayment program created by Congress in 2007 as part of the College Cost Reduction and Access Act will cap a borrowers monthly student loan payments at a percentage of her or his income when the borrowers income is at least 50 percent higher than the current federal poverty line for the borrowers family size.
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The non traditional students can still look for other ways available for accessing student loans without co-signer which are still available to them provided they are able to prove that they deserve financial aid. Federal student loans are a great way for students to provide financial assistance for their education. Federal student loans are often considered to be safe and secure mode of financial assistance. These federal loans have many benefits and is available at both undergraduate and graduate students. Many countries including Australia USA UK India and other countries providing the loans federal student financial assistance or welfare programs for students in schools or higher education. Federal student loans generally have lower interest rates many mortgage options with flexible payment options and the loan assistance to students seeking funding for education. For most cases a federal student loan can be a very economical for higher education.
The collections agencies get a commission on collected debt and are often owned by the very entity that originated the loans i.e. Sallie Mae. The Building of the Student Debt Prison. Prior to 1976 student loans were dischargeable in bankruptcy without any constraints. Of course if you look back at statistics from that time there wasnt much student debt to speak of. When the US Bankruptcy Code was enacted in 1978 the ability to discharge student loans was narrowed. Back then in order to have your loans discharged you had to be in repayment for 5 years or prove that such a repayment would constitute an undue hardship. The rationale for narrowing the discharge was that it would damage the student loan system as student debtors flocked to bankruptcy to have their debt discharged.