Many Arkansas residents are struggling under a mountain of seemingly insurmountable debt. In many cases, student loans play a role in that debt and make it difficult for recent graduates to gain their financial footing as they enter the workforce. Some borrowers are tempted by debt relief offers, many of which tout the recently proposed Student Aid Bill of Rights backed by President Obama. When considering such offers, consumers should understand that there is no firm plan currently in place, and there are no debt relief programs that will lead to the total discharge of debts.
Many of the current offers charge borrowers fees for services that are available free of charge. For those who owe federal student loans, there are a number of programs aimed at making repayment more manageable. Individuals who want to learn more should look into consolidation options through the official government website. While there are a number of consolidation offers made available through private entities, these services can be obtained for free through the government.
Loan consolidation can provide a measure of relief to those who are currently paying multiple student loan accounts. However, consolidation does nothing to reduce or eliminate the total amount of debt owed. Only personal bankruptcy can lead to the elimination of certain forms of consumer debt.
That said, bankruptcy will not erase most student loans. It can, however, lead to the discharge of debts held in consumer accounts, such as credit cards and other lines of credit. Having these financial burdens resolved can give Arkansas residents the financial freedom to continue paying down their student loans, while leaving them with enough for their living expenses.
Source: USA Today, “College loans won’t disappear with debt relief plans“, Susan Tompor, May 17, 2015