US Government Collecting Loans from Students in Debt

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    Did you walk away with more than just a degree? Did going to college cost you more than you bargained for?

    Hope for those in debt with Student Loans

    If you are one of the millions of college students facing repayment of student loans, there may be good news on the horizon.

    The most recent research suggests that American students owe more than 1 trillion (yes trillion, with a "t") dollars in student loan debt. That debt is divided among some 40+ million former college students with an average monthly loan payment of $351 or more.

    And while student loan debt is high, what's troubling is that the delinquency rate among those in debt because of it is around 11%. ​To put that number in perspective, most banks do not want their loan delinquencies to be more than 5 or 6% of their total loan volume.

    The Bigger Issues

    Many financial experts are worried that the statistics mentioned above point to a debt crisis in the U.S.

    While the fallout from a student loan debt crisis would not be as dramatic as the recession experienced in 2007 and 2008, there is still some concern for the broader economic picture.

    Students who find themselves paying over $350 per month on college loans are not able to put that money elsewhere. Instead of buying homes or cars, these individuals are having to put that money toward their student loans.

    Part of the reason for this is that adults who have graduated continue to face a slow job market. In fact, it is partially this reason that may allow many students to have their student loans forgiven completely.

    Defrauded Students

    Thousands of students across more than 100 campuses of Corinthian Colleges were promised high-paying jobs upon graduation.

    In addition to this, the degrees offered by those colleges under the Corinthian umbrella were misrepresented. Students who attended one of Corinthian's schools under either the Everest or Wyo Tech brands have now been offered a path to student debt forgiveness.

    Hoping to avoid similar situations in the future, the Department of Education made an announcement in February of 2016. A Student Aid Enforcement Unit was created to respond in a more timely manner to complaints about colleges attempting to defraud their students.

    The key, according to experts, is to make sure that the degree you're seeking is worth going into debt to receive.

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    This recently created enforcement unit is good news for those preparing to attend college. By cracking down on those colleges that promise false degrees or job placement, students are less likely to be "duped" into signing up for unnecessary debt.

    If you didn't attend one of the Corinthian colleges, but are still in debt and struggling to pay back your student loans, there may be another way to pursue loan forgiveness.

    Public Service Jobs

    If you have a degree in one of the following fields and are in debt from federal loans, you may be eligible for the Public Service Loan Forgiveness Program:

    • Social Work
    • Law
    • Veterinary Medicine
    • Education
    • Health Professionals

    By working for the government at the federal, state or local level, you may qualify to have some or all of your student loans forgiven. Working in certain government entities could make you eligible for this program. A few of those departments include:

    • U.S. Department of Justice
    • U.S. Department of Agriculture
    • U.S. Department of Health and Human Services,
    • U.S. Department of Education

    Working for the state-level organizations of these departments could also be considered an acceptable job to qualify for student loan forgiveness.

    More Good News

    Despite the rising cost of education and the number of adults living with student loan debt, college tuition is still considered an investment.

    Those with a college degree still tend to make more compared to those with only a high school level education. The key, according to experts, is to make sure that the degree you're seeking is worth going into debt to receive.

    In other words, are the job projections for your chosen field high enough to justify your student loans? And also, what is the earning potential within your future field of employment?

    Other Options

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    So what if you didn't attend a Corinthian or other college that may have defrauded you? What if your degree doesn't qualify you for the Public Service Loan Forgiveness Program?

    There's some good news for you too. If you have considerable student loan debt, you may qualify for deferment of forbearance exceptions.

    These options won't forgive your debt entirely, but they can lower your payments for a period of time if you are unable to find employment.

    There are pros and cons of both forbearance and deferment

    Deferment means exactly what is says. You are deferring your payments or a portion of your payments that are due for a specific amount of time.

    Whether or not your qualify for deferment will depend on:

    • Your student status (whether or not you are enrolled in graduate school, etc.)
    • Your inability to find employment
    • Your military background or current service
    • Whether or not your are disabled and are in rehabilitation

    The relief offered by deferment is certainly worth checking into if you meet any of the criteria.

    Forbearance may be an option if you are:

    • In the military
    • In a medical or dental residency or internship program
    • In the National Guard

    There are other possible scenarios that may qualify you for forbearance also, including illness or financial hardship.

    Stay Positive

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    You now know that if you are in debt with student loans that you are most certainly not alone. You may qualify for one or more of the mentioned debt forgiveness or relief programs, but if not, don't give up.

    Many students return to graduate school to obtain a degree that will qualify them for the Public Service Loan Forgiveness Program. This might be an option for you as well.

    Just remember that your education is not something that can be defined by facts and figures. It is truly an investment in your future and was worth every penny.