In the first two months of 2013, banks wrote off $3 billion dollars in student debt. This is a 36% increase from the previous year. However, this does not mean that borrowers no longer owe the money, simply that the debt is no longer being reported as an asset on the Bank’s balance sheet. This rate of default is a concern because it will limit the amount of credit extended to these borrowers in the future for cars or homes. These debtors can enroll in many repayment assistance programs in order to keep from defaulting and preserving their credit rating, however reports show that these programs are complicated and many borrowers do not even know how to enroll.
Many people that have taken out private student loans believe they have no options in assistance with repaying their student debt. Working with an experienced debt settlement attorney will allow a debtor to evaluate all of their options in taking care of their student debt and beginning on the path to financial recovery. Since most student is not dischargeable through bankruptcy, debt settlement may be the best option for student debtors facing collection agencies.