Student Loans and Debt Relief
Most debt reduction or debt settlement companies cannot negotiate and settle student loan debt. The reason is very simple, like a mortgage, the federal government backs the agency that is lending the money. Therefore, although it would appear from the outside that a student loan is an unsecured debt, similar to a personal loan from your bank, it is not. It is a quasi-secured loan and therefore almost non-negotiable. Does that mean that if you are struggling to pay your student loan that you are out of options? Absolutely not! While it is difficult to discount many of the federally funded student loan balances, cash discounts can be successfully negotiated. Furthermore, there are many programs available that could make the repayment of your loan much easier for you. Some of these arrangements are listed below:
MODIFICATIONS: Many student loans are simply impossible to repay for some borrowers. Under certain circumstances: a lender will agree to modify the repayment agreements, generally lowering the interest rate and/or the monthly payments
LUMP SUM PAYOFFS/CASH DISCOUNTS: If you have the ability, lump sum payoffs can be arranged at a discount. While many student loans have restriction on the amount of a settlement, even small discounts can result in substantial savings to you. The settlements can vary drastically from lender to lender and agency to agency. Nationwide Debt Reduction can look into your personal situation and create a plan tailored just for you.
DEFERRMENTS: You can arrange a deferment of your payment to a date sometime in the future. Usually, the payments can be deferred for as much as a year. In some circumstances, the deferment period could be substantially longer. During this period, the interest accrues and the balance on your loan will increase accordingly.
FORBEARANCE: In this plan, the borrower is behind in payments and there is a demand for the full amount owed in arrears. We are generally able to negotiate a payment plan for the amount in arrears over a year to 18-month period. Typically, after a year, the loan will be brought current and negative credit information will be deleted or modified to show that the loan is current.
CONSOLIDATION: In this plan, multiple existing student loans can be combined into a single agency or one single account.
HARDSHIPS: Under certain rare circumstances, student loans may be forgiven, deeply discounted or discharged in bankruptcy. Typically, this kind of arrangement requires special circumstances…disability, injury or other circumstance that makes it impossible or difficult to repay the loan.
If you have any questions regarding your student loan(s), contact Nationwide Debt Reduction, toll free at 800.890.6658 for answers.
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05-20-2009, 05:09 PM
