Student Loan Defaults are Increasing
As per U.S. Department of Education the default rates in federally guaranteed student loans, is going to increase by 6.9% (2007 Fiscal year). 2 years ago it was 4.6% and since 1998 new default rate is the highest. The private student-loan market is also showing the same trend. Their default rate has almost touched double of the last year. A staff from Boston-based National Consumer Law Center also voiced the same that default rates are increasing.
The lenders are being flooded with the please of help as the students are being under huge debts and increasing unemployment rate is worsening the situation.
There is a temporary relief being provided by the federal government. If the borrowers finding it difficult to repay the loans, they can request the lender to hold on the payment until they are being stabilized. In this way the students can have a temporary relief but their interest will grow with the time. They can also opt for forbearance. But as the default rate is rising, the lenders are also being much stricter before granting the forbearance. According to the market sources normally the lenders allow the forbearance to hide their mistakes of giving loans to the people who can’t afford the loan.
But now many lenders are refusing the borrowers please for forbearance by saying that they have granted much forbearance and are not able to afford more. We can also find some websites with the assistance program to repay the loan. This is the only way left for them. This way they can find some relief.
