Student loan debt is a major financial burden for millions of Americans, especially those who belong to the Millennial and Gen-Z age groups. Currently, the combined student loan debt for all Americans is a whopping $1.7 trillion! During the COVID-19 pandemic, borrowers with federal student loans were granted some relief. The relief measures included a suspension of federal student loan payments, 0% interest, and stopping collections on defaulted loans. However, this emergency relief has been extended for the last time, scheduled to end January 31, 2022, leaving many borrowers without assistance. Can a nonprofit credit counseling agency help with student loans? ACCC explains:
Do Credit Counselors Help with Student Loans?
Nonprofit credit counseling agencies are reputable places to find help free debt advice and debt management programs. Some credit counselors at ACCC are also experts in dealing with student loans. Though not all student loans are eligible to be included in a debt management program, counselors can help consumers by educating them on the various types of repayment plans for federal student loans, or giving them tips on how to negotiate with lenders for private student loans. Credit counselors can help borrowers explore various options, including:
- Eliminating the loan altogether through loan cancellation
- Considering other, more affordable payment plans or loan consolidation. Monthly payments on some income-driven plans can be as low as $0.
- Postponing payments through deferment or forbearance programs to avoid delinquency/default
Don’t Wait to Get Help with Student Loans
If you need help with student loans, it’s important to address the problem immediately. Waiting until your loans are delinquent or in default could negatively impact your credit score. Student loans can positively impact your credit if you pay them on time, but there can be serious consequences if you don’t. Payment history is the most important factor that goes into determining your credit score. Late payments can decrease your score, which is bad news if you’re looking to apply for new credit soon. The government can also garnish your wages if you default on federal student loans. This means that they will automatically take a portion of your paycheck if you don’t pay on your student loans.
Additional Help from Credit Counselors
Student loans may not be the only kind of debt you’re struggling with, and credit counselors can help you with other financial problems too. If you’re overwhelmed by credit card or medical debt, a nonprofit credit counseling agency is one of the best places to find help. The credit counselors will look at your overall financial picture, help you come up with a budget, and determine what your best options are moving forward.
If you’re struggling to pay off debt, ACCC may be able to help. Call 800-769-3571 to speak with one of our certified credit counselors.