Should We Change Our View of Student Loan Debt?

eye with reading glassesWhile news regarding student loan debt is a daily occurrence lately, there are still many things we do not know about how debt is affecting borrowers. There are many who believe that the same amount of student loan debt will impact different types of borrowers in drastically different ways. The individual circumstances of each borrower will dictate how much the student loan debt imposes a financial hardship. Thus, in order to fix the debt problem, we must focus on lending practices and recognizing high-risk borrowers. However, if you are already struggling to repay your loans, the legal team at LSS Law, can help you create a strategy to deal with all types and sizes of student loan debt, based upon your unique circumstances.

The Brookings Institute study of student debt revealed that student loan borrowers were paying nearly the same percentage of their monthly income toward loan payments in 2010 as they were paying in early 1990s. The study also found that borrowers with the larger debt loads were those that were more likely to be able to repay it because they had gone to graduate school.

Interestingly, the study also revealed that borrowers having the most difficulty repaying their debt were those with lower levels of debt (less than $5,000) and borrowers with some college but no degree. Thus, those with higher levels of debt were actually better off, because they had gotten more education and often significantly higher paying jobs.

The data seems to suggest that lawmakers should quit focusing on total debt and worry more about student borrowers' ability to repay their debt. The recent changes to income-based repayment plans are attempting to accomplish this, but there also needs to be assistance at the beginning of the process, when students are taking out their student loans. This means providing student loan borrowers with more information, better income-share agreements and requiring colleges to partake in a share of the risk.

We help all kinds of borrowers – borrowers with a lot of debt and borrowers with a little debt. Don’t assume that you have too little debt or that you are past the point of obtaining help. Call us today for an appointment!

Please keep in mind that every matter is different. If you have questions about your student loan debt and you would like to schedule a no-cost consultation to discuss your options, please contact our office by completing the form on this website or calling us at (954) 932-5377


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