Our friend Denise Richardson of givemebackmycredit.com has posted an article that discusses the huge percentage of student loans that defaulted last year. The national default rate on student loans was about 7% last year, credit cards defaulted at 8.8% and mortgages were defaulting at 9%. That 7% of defaulted student loans equals to roughly $876 billion, which is actually more than what national consumers owe on their credit cards.
The financial experts in the US are least worried about the rise in the student loan default rate. They are of the opinion that the student borrowers just can’t ignore the huge amount of student loan debt level with such a huge amount of educational loans.
Student debt reached $880 billion by the end of the summer in 2010, and that number is estimated to raise $2800 every second. The lack of gainful employment opportunties is also causing recent graduates to default on their student loans. The government is trying to help the situation by trying to increase job opportunities for students.
Here is some advice from financial experts for students who have taken out loans to finance their college education.
-Seek Federal Aid. If you owe a lot from federal educational loans be sure to apply for federal student debt consolidation loans. One of the benefits of that type of loan is that it helps student borrowers repay their federal loans by setting up easy monthly payments.
– Look for scholarship entries. Most scholarship money is claimed by students, but every year millions of scholarship dollars still go unclaimed. Looking at all your scholarship options is an easy way to obtain easy and free money.
-Don’t rely too much on private student loans. Financial advisors usually advise students to steer clear of private student loans because of the high, unfixed interest rates. Payments you make tend to go toward interest and very little goes toward the actual loan.
-Use a student budget calculator. A budgeting calculator can help you set up a budget tailored to your needs, lessening the chance that you will default on it. You can also change your budget every year, which is much more practical than following the same budget even after your needs have changed.
-Make the minimum monthly payments. The easiest way to protect yourself from destroying your credit score and financial future is to make the minimum monthly payment for your student loan. Even if it doesn’t feel like it’s doing any good, it’s saving your credit score.
If you have had problems with debt collectors, or have been harassed by one, and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.
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