Students who find themselves in debt due to overwhelming student loans have limited options to erase that deficit, which has led to a higher default rate, according to The Ventura County Star.
A recent report from the Institute of Higher Education Policy found that for every student loan borrower who defaults, at least two more become delinquent - defined as going over one year without payment, the news source adds. "We were surprised and shocked by the magnitude of delinquencies," Alisa F. Cunningham, a co-author of the report and the institute's vice president of research and programs, told the news source. "We are not capturing these borrowers in the current data that is used in policy debates, often there are more of those borrowers than defaulters." Michelle Singletary of The Washington Post explains to the media outlet that debt collection
agencies can come after federal loan defaulters through deductions from a borrower's wages, income tax refunds or by turning over their entire accounts to collections. If a loan is too burdensome to pay off, NASDAQ recommends applying for deferment or forbearance. Deferment lets borrowers forgo monthly payments for up to three years, while forbearance gives a student a payment cushion of up to five years. However, interest on the loans will continue to accrue.