The U.S. Department of Education recently reported the default rate of federal student loan borrowers has increased for the first time in five years. Now 11.5 percent of borrowers are in default, up from 11.3 percent last year. The Department measures default rates based on borrowers who are within three years of leaving school, so the true share of defaults may be even higher. Many experts worry that this means the numerous available federal repayment options are still unknown to many borrowers. Ameritech Financial, a student loan document preparation company, helps people with federal student loans stay out of default by guiding them through all their options and helping them stay current with their loans through full repayment or forgiveness.
A rise in defaults is no small matter. Default has a large and lasting impact on a person's credit, sinking their credit score and undermining their ability to secure a credit card, car loan, mortgage, or apartment. However, a variety of income-driven repayment (IDR) plans are available to avert default. Some borrowers pay zero dollars a month in an IDR and are in good standing with their loan.
"The thing about default is that it's avoidable," said Tom Knickerbocker, Executive Vice President of Ameritech Financial. "But borrowers clearly aren't being provided the proper tools and information to prevent it. Either they aren't aware of what their options are or they might be tripped up by what their servicer is telling them, which from our experience seems to almost always be inaccurate. Ameritech Financial assists our clients to work to avoid default by helping them find and apply for an income-driven program that they can afford."
A lack of information might be making matters worse for borrowers already at high risk for default. These borrowers tend to be former students who did not complete their degrees and have a relatively low balance of less than $20,000. Borrowers in this category might especially benefit from an IDR because their monthly payment could be close to or at zero dollars. Borrowers who are at risk of defaulting should research their IDR options thoroughly many are similar, and borrowers often find the subtle differences confusing. If a borrower needs help with this search, Ameritech Financial Account Specialists are certified on IDR plans and can explain and help enroll almost any interested borrower.
For those who have already hit default, the future might look grim, but there's still hope. With federal student loans, there is life after default by way of loan consolidation or default rehabilitation. Consolidation does not remove the default from a borrower's credit report, but it opens up the possibility for those previously defaulted loans to be entered into an IDR program, making it less likely they will default again. Default rehabilitation removes the default from a borrower's credit report after nine months of on-time payments. However, both of these options have potential drawbacks and both can only be utilized only once, so it's important for borrowers to consider their own unique situations.
"Climbing out of default is definitely possible and Ameritech Financial is a resource borrower it can use for support through the process," Knickerbocker said. "We take a close look at each client's unique situation if they're current on their loans, in danger of defaulting, or maybe already defaulted and help them make their student loans work with their personal financial goals. We don't do, and never have done, one-size-fits-all solutions."
About Ameritech Financial
Ameritech Financial is located in Rohnert Park, California. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation for federal student loan forgiveness programs offered through the Department of Education.
Each representative on the phone is certified through the International Association of Professional Debt Arbitrators (IAPDA) and has received the Certified Student Loan Professional certification through Association for Student Loan Relief (AFSLR).
Ameritech Financial prides themselves on their exceptional Customer Service.
To learn more about Ameritech Financial, please contact:
5789 State Farm Drive #265
Rohnert Park, CA 94928
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