If you are struggling with student debt, you’re not alone. Over 14% of federal loan borrowers go into default within three years of beginning repayment, according to the Department of Education, and student loan debt exceeds $1.3 trillion throughout the United States.
If you have exhausted all postponement programs and payment-reductions offered by your lender, a settlement may be an option if you are able to offer a lump sum. There are three general types of settlement offers which collection agencies can make without approval from the Department of Education: the remaining principal balance and accrued interest (excluding collection charges); the principal balance and 50% of unpaid interest; or 90% of the current balance and accrued interest. Settlements which do not fit these categories are still possible, but may take longer due to the need for approval from the Department of Education.
To pursue a settlement with the assistance of an attorney, you will need to outline your current scenario and budget, as well as your plan of action for post-settlement. Also make sure to summarize your finances, including all income, debts, and liquid assets.
If you are struggling with student loan debt, contact an experienced student loan attorney today for a free consultation.