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Graduates: beware of misleading debt relief offers

Student loan debt is a burden for many Americans. At present, nearly 7 million are unable to pay their student loan bills each month, and many more are on the verge of being unable to afford their payments. In this environment, it shouldn’t come as a surprise that companies are now offering to help reduce or eliminate that debt at a cost.

Such offers can, no doubt, be tempting for debtors, but not necessarily worth the money, since the assistance almost always involves utilizing federal programs the debtor can apply for himself or herself relatively easily, and without paying a fee. There isn’t necessarily anything wrong with paying a debt relief company to do this work, but it can be misleading to debtors, who deserve to be informed rather than played. 

One of the programs available is Income-Based Repayment, under which a graduate is able to pay off their loan according to their income ability. To participate, one needs to fill out the requisite paperwork for each lender. Private loans, though, are not eligible for such repayment.

Student loan debt, not being dischargeable in bankruptcy except under the most extreme of circumstances, is something that exacts its dues. With more and more people obtaining higher education, the burden is one being shared by more and more people. Those who struggle with such debt do well to research their options in terms of repayment. Those who have questions as to whether they may qualify for discharge of student loan debt in bankruptcy should contact an attorney to have their case evaluated. Such cases, again, are rare, but they do occur. 

Source: CNBC.com, “Student loan debt relief industry draws scrutiny,” Herb Weisbaum, August 20, 2013. 

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