It’s noteworthy that 69.8% of high school graduates in the U.S. attend a college or university. The average cost of tuition is more than $20,000 per year. Most students are not able to afford to pay for tuition out of pocket and need to take out student loans. If you’re planning to go to college in the near future or know someone who is, you need to know what you’re getting yourself into when you take on student loan debt. To help you out, we’re going to debunk five of the top myths associated with student loans.
Loans Can Be Dismissed in Bankruptcy
Typically, if a person gets overwhelmed by debt, they can file for bankruptcy to eliminate this financial burden. Unfortunately, what many people don’t realize is that both federal and private student loans are not discharged during bankruptcy. Types of debt that can be eliminated via bankruptcy include:
- Credit card debt
- Mortgages
- Personal loans
- Car loans
- Other secured and unsecured debts including legal judgments
Student loans can’t be discharged in bankruptcy because laws are in place making it near impossible to eliminate them.
You Can Easily Lower The Interest Rate
If you’ve taken out a vehicle loan or a home mortgage, you might be familiar with the idea of refinancing your debt. Home mortgages and vehicle loans can be refinanced easily (if you qualify) because they’re secured debts. Much like the new loan achieved in a refinance, student loans can be consolidated into a new loan on better terms. Student loan consolidation is combining multiple loans into one new loan. The benefits of loan consolidation often include a lower interest rate but might also include a lower monthly payment or a shorter payment plan. However, qualifying for a student loan consolidation often has a more stringent qualification process as student loans are unsecured debts.
Anyone Can Qualify for Student Loan Forgiveness
There’s a growing debate over the possibility of a national student loan forgiveness program. Although student loan forgiveness currently exists, it’s not readily available to everyone. The only ways to currently qualify for student loan forgiveness include:
- Working in public service
- Making consistent payments on a federal income-based repayment plan for 20 or 25 years
What most people don’t realize is that payments must be consistent. Furthermore, the only types of student loans that qualify for forgiveness are federal government loans.
You Won’t Have to Repay Your Debt
Many students take out student loans under the impression that they can get away with not paying them back. This is largely due to the fact that many students are not educated regarding student loan options and implications. It’s important to know that not repaying your debts has serious implications, including:
- Lower credit score
- Unable to qualify for home mortgages or other loans
- Debt collector calls
Making a plan to repay student loans is essential as these loans are not going anywhere.
There Are No Repayment Options
Unfortunately, life is often unpredictable and people who once had the ability to repay their student loans might not be able to continue doing so in the future. Many people have the misunderstanding that there are no alternative options for student loan repayments aside from their regular terms. Many creditors, however, offer alternative repayment options, including income-driven repayment and settlement on private student loans. If you’re unable to qualify for alternative repayment options or are unable to afford the payment, you should discuss debt settlement with a trusted attorney.
Student Loan Settlement Lawyers Who Fight For You
McCarthy Law PLC is a trusted law firm that is committed to helping you settle your debts. They have extensive experience negotiating with creditors and will work tirelessly so you can restore your credit and get your life back. In addition to student loans, they also have experience settling credit card debt and personal loan debt.
To schedule a free case evaluation, call 855-976-5777 or contact us online today.