Ameritech Financial on High-Balance Borrower Trends
ROHNERT PARK, Calif., March 7, 2018 /PRNewswire/ -- The number of students leaving college with high student loan balances has been increasing for years. Such borrowers hold more than $50,000 in student debt and, though they make up a small percentage of all borrowers (about 14 percent), they hold the majority of debt in the country. Additionally, characteristics of high-balance borrowers are changing, which may signal distress in the student loan borrowing world. Ameritech Financial, a document preparation company, helps struggling borrowers in their quest to handle their loans by assisting them with income-driven repayment plan (IDR) applications.
"It can be downright scary to graduate from college with any degree and discover a high loan balance," said Tom Knickerbocker, executive vice president of Ameritech Financial. "If that happens, though, we suggest limiting the initial panic and realizing that there are usually options for managing any level of debt."
Up until the early 2010s, high-balance borrowers were mostly graduate students or parents receiving PLUS loans, which require borrowers to pass a credit check. Such borrowers are considered low risk. While their balances have climbed, their default rates have not. Recently, there has been a decline in the share of high-balance borrowers whose balances are decreasing through repayment. This is often due to income-driven repayment plans or long-term use of delay options like deferment or forbearance.
However, independent undergraduates and those attending for-profit schools are making up greater shares of high-balance borrowers today, thanks to high borrowing limits and potentially more time spent to earn a degree. That's worrisome because employment prospects for those graduates may not be sufficient to support high debt payments. Such borrowers are considered higher risk, and their default rates are expected to increase.
Additionally,the report shows that large balances often increase by the end of the first year of repayment, meaning those borrowers are either delaying their payments or enrolling in income-driven repayment plans in which their payments do not fully cover the interest that accrues. For those borrowers in IDRs whose principal continues to increase, they may receive loan forgiveness at the end of the 20- to 25-year term.
"Borrowers might struggle with their loan payments for any number of reasons," said Knickerbocker. "At Ameritech Financial, we help any struggling borrower understand and apply for income-driven repayment plans that can potentially lower their payments and make their financial lives a lot less stressful."
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.
Ameritech Financial is a member of the Association for Student Loan Relief (AFSLR) and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional customer service.
Contact
To learn more about Ameritech Financial, please contact:
Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
[email protected]
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SOURCE Ameritech Financial
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