So
me college graduates are
doing something some may consider drastic to get out of their monthly student loan payments — they’re
fleeing the country.
CNN profiled one graduate,
Carl, who did just that. Carl, who declined to give his last name, estimates
his private loans are more than $70,000. When Carl couldn’t make his $450 a
month payments, the debt collectors started calling. That’s when he bolted.
Unable to pay the bills, and
with added pressure from creditors, student loan debt can be overwhelming for
young people. And the loans can’t be easily gotten rid of — even through
bankruptcy.
Carl told CNN that while he
hopes to one day return to the U.S.
right now, staying abroad is his only option.
According to Chris Lang of
the New York-based debt collection agency, ConServe, is about $60 billion in
defaulted student loan debt. Lang told CNN that while only about 2 to 4 percent
of delinquent student loan debt is owed from students abroad - for some, it
seems like the only way out.
In order to collect from
these students, collection companies would usually need to hire an
international counsel or a third party collector to recoup the debt, cutting
into their profits and reducing their incentive to go after a debtor, CNN reported.
Chris is in the same boat.
He racked up $160,000 in student loan debt with a master's degree in music. He
thought he’d be paying $600 a month, but was astounded to find out his monthly
payment came to $2,400.
"I am upset at myself.
I could have gone to a cheaper school," Chris told CNN. "But I'm most
angry at the fact that for anyone who has debt that's not student loan debt,
there's relief. You can get into $150,000 worth of credit card debt and you can
declare bankruptcy and you can go on with your life. But with student loans,
you're being punished for being a better person."
But there is SOME relief for
graduates. According to Mark Kantrowitz, publisher of FinAid.org, here’s what
to do if you can’t afford to pay your loans back.
- If it’s short term, apply for an
economic hardship deferment or forbearance which would suspend or reduce
your monthly payments. To find out if you qualify for these programs,
check out the hardship calculator at http://www.finaid.org/.
If your problems are longer
term – for example, your career path doesn't pay well:
- Look into an extended repayment plan to lower
your payments. Keep in mind you’ll wind up paying more in the long run.
- Talk to a non-profit counselor for free.
If you are put on a managed debt program, there is typically a small fee.
To find a non-profit credit counselor in your area go to the National
Foundation for Credit Counseling at www.nfcc.org.
If
you have federal loans through the Direct Loan program:
- You may qualify for an income contingent
repayment plan. In this case your payments are based on your income and
your debt load.
- Call the Federal Student Aid Ombudsman
at http://www.ombudsman.ed.gov/
or call 1-877-557-2575 if you can’t resolve your issues.
If you have defaulted on a
federal loan:
- To get back on track, you must make nine
to 12 full payments of some agreed-upon amounts within a certain time
period to the Department of Education. For more information on this,
contact the Department at 1-800-621-3115.
Information compiled from
CNN.
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