Can you imagine what it would be like to have thousands of dollars worth of student loan debt? Not being able to buy your groceries? Not being able to pay rent? Being unable to pay for a vacation or a holiday with family because your student loan debt is taking up most of your monthly income. This happens after making some poor decisions that hold you back from achieving your goals.

The good news is there is hope for you. Our Arizona student loan debt lawyers can help you by getting rid of your student loans. Trust the Phoenix Fresh Start team to help you find a solution for your student loan debt. Call today for a free consultation! 

A Brief Look at Private vs. Federal College Loans

Many people want to go to college, but the cost keeps going up and might make it impossible for them to do so. If you don’t have enough money saved to pay for college, you can look into loans.

Private Loans

There are several options for private education loans, including banks, credit unions, and other financial organizations.

You can apply and qualify for a private loan whenever you want and use the money for whatever you want, such as tuition, room and board, books, computers, transportation, and living costs.

Private loans are not based on how much money you need, as some federal loans are. You might have to show that you are creditworthy by passing a credit check. If you don’t have much or any credit history, or if it’s bad, you might need a cosigner on loan.

Federal Loans

The U.S. Department of Education is giving out federal student loans. They have lower interest rates and easier ways to pay them back than private loans most of the time.You have to fill out and send in the Free Application for Federal Student Aid (FAFSA) to get a federal loan. 

The FAFSA asks many questions about the student’s and parents’ income, investments, and other essential things, like whether or not the family has other college-aged children. The FAFSA uses this information to determine your Expected Family Contribution (EFC). This number is used to figure out how much help you are eligible to get.

Disadvantages of Student Loan Debt

Student Loan Debt AttorneysNot eligible for income-based repayment or federal forgiveness.

If you have trouble making your monthly payments on your federal student loans, you can use a plan based on your income. With these plans, the most you can pay on your loans is a small part of your income. These plans can’t be used for private student loans.

Some private lenders have options like deferment or forbearance for people having trouble paying their bills. However, this is not the same as having your regular payment capped at a certain percentage of your income. Also, if you use private student loans, you won’t be able to use federal programs like (PSLF) Public Service Loan Forgiveness.

Still, your state or employer might offer a program to help you pay off your private student debt.

Interest rates may fluctuate.

The interest rates on your federal student loans won’t change as long as you have the loan. No matter what happens with the economy, it will never change. Some alternative student loans also have fixed interest rates, but not always. Instead, you might get a rate that changes over time.

If interest rates rise over time, so will your variable interest rate – and your monthly payment. Private lenders offer “hybrid rates,” which are fixed and variable rates. These rates carry the same risk as fixed rates. When you take a private student loan, you often have the option of choosing between a fixed or variable interest rate.

No federal assistance

Depending on your loan type, the government may help pay your interest on some federal student loans. If your debt is eligible, the government will pay your interest while you are in school or even while you are paying off your debt. Interest won’t be added to your debt, saving you hundreds or thousands of dollars.

One disadvantage of private student loans is that this option does not exist. Interest starts to add up from the first day, and in some cases, you may have to pay interest while you are still in school. If you don’t pay the interest as you go, it will all be added to your debt by the time you graduate.

You may need a cosigner.

Even if you have good credit, you might need a cosigner for a private student loan. This is not the case for most federal student loans. After all, you might not be able to work and make money while you’re in school.

If you can’t pay back your debt, the law says that the cosigner must. If you miss a payment or, even worse, don’t pay back your loans, your cosigner’s credit will be hurt, and debt collectors can go after them for payment.

Private debt isn’t generally canceled after death.

If the borrower dies, the federal loan is paid off. The debt will be paid off, and it won’t hurt what you leave behind.

But if you have private student loans, the lender could try to take money from your estate if you die. Even though private student lenders can’t get money from family members if the debt isn’t cosigned, they can still take money out of your inheritance.

Also, some private loans go into default automatically if your cosigner dies, even if you have been making payments on time.

Why You Need a Student Loan Attorney (Before It’s Too Late)?

Lawyers who specialize in both private and federal student loans are called “student loan attorneys.” The small print on loans can be hard to understand for the average person. Nevertheless, these lawyers have been trained and have worked with loans and lenders before.

Student loan lawyers can help their clients in many different ways. They can help you talk to banks and credit unions about changing your payment terms or lowering your interest rates. They can also give you advice about the law and stand up for you in court.

Having a student loan lawyer can be very helpful if you have private student loans. Most of the time, state laws govern these kinds of loans. A licensed lawyer in your state will know everything there is to know about your options.

When To Hire a Student Loan Attorney?

There are times when you don’t need to call a lawyer. Getting in touch with your loan servicer or filling out paperwork online can solve many problems with your student loan. You don’t need a lawyer if you need to change your payment plan, go into forbearance, or apply for a program that will forgive your student loans.

But if you find yourself in one (or more) of the following situations, a lawyer can help:

  • You are being sued for a student loan and need legal counsel or guidance.
  • You are being bothered by a loan servicer or a debt collector.
  • You don’t know your legal rights to a student loan.
  • You need someone to talk to credit bureaus, dispute bodies, debt collectors, lenders, and services on your behalf.
  • You need help putting together, filling out, or reviewing any contracts.
  • To wish to sue any businesses associated with student loans that may have hurt you.

Struggling with student loan debt? Don’t wait to take action! Call us now!

Phoenix Fresh Start student debt relief attorneys have seen the harm that can result from poor advice, and they know how to help. Take the first step in your debt-relief journey, and contact us by calling or going online today. Our experienced Arizona student loan debt attorneys will help you begin your journey towards a fresh start with your student loans!