Aside from medical bills and mortgages, student loans are the leading cause of financial distress. With the cost of obtaining a college education rising, more students than ever before are graduating with large student loan debts weighing their future down. When it comes to debt counseling services, a large part of our efforts at Superior Debt Relief Services has to do with helping people manage their student loans alongside their other financial obligations.
Millenials are being especially hard hit by the increases in tuition. While obtaining student loans from the federal government has become easier, so too has obtaining them from private lenders. This has created a dangerous mix of easy credit for college degrees. Further, the federal government has pegged the student loan interest rate with the Treasury note. When the yield on the note was low, it was at 3.86%. Now, it’s increasing and is at 6.21% for Stafford Loans.
That’s a significant increase, and PLUS loans are increasing as well. Making everything worse, Congress has capped the limit on Staffords at 8.25% for undergrads, 9.5% for graduate Stafford loans, and 10.5% for Plus loans. These are considerable interest rates and should they rise, the burden on student loan bearers could become, well, unbearable.
As student loans increase in size, Millenials are finding it difficult to start families, buy homes, and save for retirement. The middle, and upper-middle class has been hit especially hard as qualifying for federal loans is difficult in this income bracket. Thus, many are seeking private student loans to fill the gap. Some of these can charge considerably higher interest rates, which in turn exacerbates the debt problem.
Further, there’s no “get out of debt” card. The government prohibits inclusion of student loan debt in bankruptcy filings. Thus, learning to manage them by reducing interest rates, consolidating loans, and developing financial strategies to eliminate them is imperative for anyone wishing to build a solid and stable financial future that’s stronger than the expensive sheepskin in the frame on the wall.
We invite you to contact Superior Debt Relief Services to learn more about the debt counseling services we offer, and the ways they can help you mange your student loans and other debts throughout the year. We will be happy to answer your questions and help you select the debt reduction strategies that are right for you and your financial circumstances.