Student loans form the basis of tertiary education in the United States. The majority of these loans are through the federal government, with the US currently possessing a total student loan debt of $1.6 trillion. For many, student loans are the only way to access tertiary education. With more young people than ever before attending college, but also tuition costs at an all-time high, it can be an anxiety-inducing experience to apply for your loans. Avoid these common disputes this month, whether you are a current or potential student loan borrower
Facts about student loan debt in the US
According to Pew Research Center data, one in four adults under the age of 40 has student loan debt. Student loan debt is the most prevalent among this age group, considering that more people under 40 attended college than those over 40, as well as the fact that many people will have (hopefully) paid off their student loans by the time they are over the age of 40.
According to the same data, the average debt owed by a student loan borrower who earned a four-year bachelor’s degree is between $20,000 to $24,999.. Among those who hold a postgraduate degree, the average amount of debt owed is between $40,000-$49,999. Of those who hold a postgraduate degree, approximately a quarter owe $100,000 or more.
7 common student loan disputes to avoid this month
With so many students owing student loans, the entire system is incredibly complex to manage. Because of this, disputes are bound to come up just by the sheer number of people who are part of the system. When a dispute does happen, it can be very distressing for borrowers, particularly if the dispute is related to when you no longer owe any debt. These are the most common disputes experienced by borrowers:
- Unexpected owed fees
- Student loan forgiveness disputes
- Payment problems
- Higher account balance than expected
- Loans are incorrectly placed in default
- Wage Garnishment
- Denial of a loan discharge
The Federal Student Aid’s information on Common Loan Disputes provides a comprehensive overview of why these problems may occur, as well as providing direction on what to do to solve these problems. It can be very overwhelming when you are unable to understand why your student loans are reflecting the way that they are. It is important to always be checking up on your account, and if a problem is noted, contact the Federal Student Aid’s information center as soon as possible.
The current student loan crisis in the United States
If you are currently facing a problem with your student loans and are unsure how to address it, the Federal Student Aid’s guide on solving disputes can provide you with important resources on where to start in resolving your dispute with the federal government. If, however, you are a private loan borrower, you will have to resolve your dispute internally through the entity’s resources. It’s important to contact your loan servicer directly and request clear instructions on how to proceed with your dispute resolution. Keep detailed records of all communications and ensure you fully understand your rights and options before proceeding.
To make matters more distressing for student borrowers, there are currently internal problems in the federal government related to the structuring of student loans. The Biden Administration’s SAVE plan is currently locked in a legal battle, meaning that borrowers who are on income-driven repayment plans are currently unable to make any changes to the state of their loans. This has left many borrowers in limbo, unable to adjust their payments in light of financial hardships or changing circumstances. As a result, there is growing uncertainty surrounding the future of student loan forgiveness and repayment options.
