Pennsylvania’s defaulted student loan crisis

A student loan repayment crisis is brewing in Pennsylvania. According to the Department of Education; students who attended for-profit institutions in Pennsylvania are defaulting on their student loans at three times the rate of those who attended traditional universities. One out of every fourteen students who attended traditional universities are also defaulting on their student loans.

Like many other states in the US, the recession has taken its toll on the ability of Pennsylvanians to meet their financial obligations. Most people consider making a hefty monthly student loan payment secondary to buying food and keeping a roof over their heads.

Unfortunately, the consequences of defaulted student loans are painful. The government will take its money from you through wage garnishments, reducing your social security benefits, and withholding your tax refund. If a student loan remains in default for an extended period of time, the government often sells it to a collection agency, most of which are notorious for their unscrupulous, mean-spirited daily demands for repayment.

What can you do to avoid these consequences?

Try to enter the Federal loan rehabilitation program, which will stop wage garnishment, silence the collection agencies, and help you become eligible once again for loan servicing options like deferment. But know that you will have to meet the strict requirements of an initial 10-month repayment schedule dictated by your Federal loan officer, and the monthly payment amount may not reflect fully your current financial hardships. I

A second option is to turn to a reputable private loan servicing and consolidating company that specializes in student loans. These companies can stop the Federal government from wage and tax refund garnishments, end the collection calls, and lower your monthly payments.