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Higher Ed in the News

Student-loan borrowers get breaks

April 14, 2009

Challenging economic times are causing more borrowers to fall behind on their student loan payments.

Compared with other types of credit, the consequences of defaulting on a federally guaranteed student loan can be more severe, while getting a break on payments can be much easier.

Options available for borrowers behind on student loans

Student loan lenders working with customers

Lenders, loan servicing firms, and the federal goverment are getting more aggressive in their efforts to assist struggling borrowers. Many debtors aren't aware of the options available for deferring payment.

Unlike other types of unsecured loans, student loans don't go away in a bankruptcy filing. And once student loans go unpaid for more than 270 days, they are considered in default.

Historically, college dropouts and recent graduates who are underemployed or unhappy with the education they received were the most likely groups to default on their loans.

More recently, economic hardships are boosting delinquencies among borrowers who have paid in the past.

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