Internet ads promise huge savings on student loan debt if you consider refinancing with a specific company. The companies like SoFi, CommonBond, Credible, LendKey and Splash Financial have been under heightened scrutiny by the Federal Trade Commission.
The FTC recently sent “final warning” letters recommending they review their advertising claims so as not to make false or unsubstantiated representations. These companies will refinance your federal student loans to give you a lower interest rate and lower payment, but often a longer term. Annie Nova of CNBC writes in her article about these issues.
Use an Online Student Loan Calculator
Experts suggest that you should use a calculator usually available online to compare staying in the current student loan versus refinancing. The decision to refinance should not be done hastily and without careful consideration.
Generally, federal student loans have more consumer protections than private student loans. If refinanced, federal student loans then become private student loans.
The U.S. Department of Education offers many programs such as Income-Based Repayment; loan forgiveness and Disability Discharge. Private lenders often do not offer any of these programs and can be much less forgiving if you get behind.
According to Ms. Nova’s article, the average graduate has $30,000.00 in student loan debt. On almost a daily basis, I refer clients and potential clients to the U.S. Department of Education website for a lot of helpful information.
Can I Discharge My Student Loan Debt Through Bankruptcy?
Rarely can student loans be discharged through bankruptcy. However, it could be that you are overwhelmed with other debt that if eliminated, would allow you to pay your student loans.
It may be that you are being garnished by the student loan lender and need to file a Chapter 13 to stop the garnishment and get on a repayment plan that works better for you.
There are many options that could be discussed with a knowledgeable attorney. The student loan crisis is not easily solved, but the attorneys at all Bond and Botes locations can look at your situation and guide you in the right direction. Contact us today for your initial consultation.
Heather Ellis Banks is an Associate Attorney at the Bond & Botes Law Offices in Knoxville, Tennessee. She holds a Bachelor of Science from the University of Tennessee Knoxville, and a Juris Doctorate from the University of Memphis, Cecil.C. Humphreys School of Law. She has been helping consumers to navigate through the bankruptcy process since 2005. Read her full bio here.