The Facts Behind Student Loan Debt
Millions of Americans graduate college with thousands of dollars in debt. This debt is usually scheduled to be paid on a monthly basis and has the potential of being a recurring bill for multiple decades. There are both private and federal student loans available to enrolled students. A private student loan is an agreement between the student and the lender with repayment decided on whatever terms were outlined in the contract. The more common type of student loans are federally subsidized. This means that the guarantor is the federal government. Federally subsidized loans can come with completely different terms than private loans and can easily default if not monitored closely. Keep these facts in mind as you manage your student loan debt.
Debt Cannot Be Expunged
Unless you experience extreme hardship that requires your debt to be eliminated, which is extremely rare, your federally funded student loans will still be owed. These loans cannot be expunged with bankruptcy and do not have a statute of limitations. This means that the government does not have a specified time limit to collect the debt, which can leave you in debt to the federal government for a lifetime.
The federal government also does not need to file a lawsuit to collect on student loans, meaning your wages can be garnished without a court judgement. You will simply receive a written notice warning you of the coming action. Once garnishment takes place, it can continue to occur until your debt is paid in full.
Interests Continues to Accrue
If you took out a subsidized loan, the government will pay the interest while you are enrolled and six months after you have graduated. Once that grace period ends, you are responsible for paying the interest from then on. For unsubsidized student loans, interests continues to accrue from the day you agree to the terms of the loan. You do not have to pay this interest, however, until you finish school. The phrase “finish school” refers to you whenever you stopped attending school whether that be a result of graduating or dropping out.
If you fail to make the payments agreed upon, penalties will be added to your interests which can cause your debt amount to skyrocket.
Third Party Collection Agencies are Used
Unpaid student loans will more often than not be handed over to third party collection agencies. The federal government can work with multiple collection agencies to see who can effectively collect the amount owed. These agencies are aware that if they do not collect on these debts in a timely manner, that they can easily be replaced. This results in many agencies using unlawful methods, like calling a third party in reference to your debt, exaggerating the amount owed, and using aggressive language to collect on a student loan. These are clear violations of the Fair Debt Collection Practices Act (FDCPA) and you have the right to collect on these invasive acts.
Our team of experienced FDCPA attorneys at The Law Offices of Jibrael S. Hindi will fight aggressively to see to it that you are compensated for these federal violations. When debt collectors call you at work or misrepresent facts, they are invading your privacy. You may be able to file a claim under FDCPA and recover significant damages. Call us today at 1-844-JIBRAEL for a free in depth consultation to put an end to the harassing phone calls. We do not collect a penny until you get paid.