The Trump administration announced on March 16 that the U.S. Department of Education is allowing lenders to charge up to 16% of the principal loan plus interest on defaulted student loans. This policy does not apply to those who took out Federal Direct Loans with the U.S Department of Education, but does affect those who borrowed from banks and other institutions. This new policy on student loan rehabilitation could escalate already high default rates on federal loans.
New Policy On Student Loan Rehabilitation
As we wrote about last week, the default rate for student loan borrowers increased 17% from 2015 to 2016 leaving borrowers to wonder what to do if they default on their student loans.
How to Get Out of Default with a Loan Rehabilitation
There are still ways to get student loans out of default with a loan rehabilitation, but this new policy could financially hurt some borrowers in default. The new policy roles back a 2015 initiative by Obama’s Department of Education to prohibit student loan lenders from charging collection fees if the borrower had enrolled in a program to make loan payments within 60 days of defaulting on their student loan.
Defaulting on Student Loan Debt
If you are worried about defaulting on your student loan debt, it’s important to know you have options. Navigating through all of the information out there can be challenging. If you have questions, call me for a free consultation at 858-217-5051. Or send me a question via my “Ask a Debt Relief Attorney” page. I also offer resources on my website to help you learn more about your student loan debt options, such as our free eBook The Ultimate Guide to Student Loan Debt Settlement and videos on my Debt Relief YouTube Channel. When you are deep in debt, it can often feel like there is no way out, but there is. Visit my student loan debt relief success stories page to learn about people just like you who are now unburdened by student loan debt.
Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego, CA. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezlawfirm.com or use our online contact form. Stay updated with the latest debt relief tips by following on Facebook and Twitter!