Education Loan Consoildation - How To Avoid Harassment

Published: 19th February 2010
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College students are accumulating quite a lot of debt, frequently exceeding $100,000. Most students today are finding themselves out of school and with no source of income to repay their student loans.

Private lending options are becoming more of a necessity and even more commonplace considering the fact that college tuition continues to increase regardless of the fact that federal student loan amounts haven't. As a result, students turn to private lenders to assist with tuition, books, and cost of living expenses .

Unfortunately, many graduates are finding themselves in default on their private loans. Although it is fairly simple to put federal student loans in forbearance, private loan forbearance is given at the discretion of the loan provider. JPMorgan Chase & Co. offers private student loan services through their Chase brand. Higher education graduates who are out of work can not get loan forbearance through Chase until they are able to give proof that they will be able to restart repayments immediately after the six-month forbearance period. This is commonly something an unemployed person can't provide.

Graduates don't only encounter the encumbrance associated with debt, but the burden or receiving unremitting calls from collectors. Often times these students don't realize that they are under protection from federal regulation, even in the case of private loans,and that they can tell the lending company to quit harassing them.

When students apply for both federal and private loans, they're informed that they will be able to consolidate these loans upon graduation. Regretably that's not always true. American Education Services won't consolidate student loans when the borrower's credit rating isn't high enough, even if AES already services all of the student loans. One student whose credit rating was too low wasn't able to consolidate her three AES loans because her credit rating was too low, and AES wouldn't even take into account her co-borrower's credit rating.

An article by the FTC, "Facts for Consumers," provides hope for borrowers "A debt collector may not call you before 8 a.m., after 9 p.m., or while you're at work if the collector knows that your employer doesn't approve of the calls. They must honor a written request from you to stop further contact."

Chase and various loan servicers, for example American Education Services, who services loans through the TERI program, may call borrowers as little as 1 or 2 weeks after a payment is due, and they may call 10 or more times in a single day with or without leaving a message. An AES rep told one delinquent borrower, "Thank you, I will note your account that you will make a payment in two weeks. I must inform you that we will continue to call you until that payment is made."

Graduates who are subjected to this sort of illegal harassment can send written notice that these loan companies are to stop communication with them. This, legally, will end the phone calls. Borrowers may decide to provide permission for certain kinds of written communication such as monthly statements and offers to lower monthly payments or forbearance.

When borrowers force the lenders to communicate with them in a lawful manner they're relieved of the pressure associated with endless calls and may focus on more useful things like securing their financial independence. This is a much more preferable solution than arguing with a debt collector over the phone and being afraid to even answer calls. This is your right as a borrower.

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