Ameritech Financial: Tackling the Student Loan Default Debt Crises Head On

With default rates at record highs, find out how Ameritech is changing the landscape by making loan rehabilitation more accessible than ever

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Ameritech Financial

Mar 02, 2017, 00:47 ET

EL DORADO HILLS, Calif., March 2, 2017 /PRNewswire/ -- Ameritech Financial, a student loan document preparation assistance company located in Northern California, is doubling down on their service offerings to student loan borrowers. Starting in March 2017, Ameritech Financial will begin assisting defaulted federal student loan borrowers by successfully helping them enroll into loan rehabilitation programs offered by the Department of Education.

The national student loan debt has reached over $1.3 trillion as of December 2016, and the national student loan default rate has hit a whopping 12 percent. In 2016 the U.S. Department of Education conducted a silent survey of 22 million Americans and found that 43 percent of them were not making their loan payments as of January 1. This means that, of the 22 million people who are in some kind of repayment plan, only 12.5 million are "current" and were making on time payments at the time of the survey.

It gets even worse. Located within the 43 percent of people behind on payments, 3.6 million were in default on over $56 million in federal student loan debt. In fact, there are currently $67.5 billion worth of loans currently in default spread amongst 4 million borrowers. On average, those borrowers are carrying in excess of $16,000 in debt. In 2015, there were more borrowers in default than were enrolled into income-driven repayment plans, a total failure on the part of servicers to help borrowers find relief.

While income-driven repayment plans have helped, the default rate has continued to grow steadily each day. The current climate indicates that borrowers are either unaware that these important programs exist, have experienced various road blocks at the servicer level as seen with Navient, or have had some sort of major life change where they didn't have the chance to enroll into a program before going into default. In fact, a report by the United States Government Accountability Office found that in 2012 an estimated 70 percent of borrowers with defaulted loans met the income requirements for an income driven repayment plan. Furthermore, according to the National Student Loan Data System, there are currently over 1 million borrowers defaulting for the first time in 2016, who also happen to be holding over $19 billion worth of loans. Over 90,000 people have defaulted for the second time in 2016. Every quarter, about 2 percent of all federal student loan borrowers go into default.

With the government programs in place, why is the default rate still growing?

Until now, Ameritech Financial has only worked with borrowers who are up-to-date on their federal student loan payments. Currently, only borrowers with the "current" status are eligible for repayment programs offered by the U.S Department of Education. With these "new" rehabilitation programs currently in place for defaulted borrowers, Ameritech Financial has now decided to extend their line of services to help struggling borrowers enroll into such programs, which can be incredibly complicated for borrowers to navigate on their own. "We have to help these people, it's as simple as that" Tom Knickerbocker, Executive Vice President of Ameritech Financial said, "We speak to thousands of people each month who are in default that are looking for a way out. The collection companies are calling their phones daily, garnishing their wages, levying their taxes, and they keep calling month after month for help. The people we speak to can barely pay their bills or put food on the table. It seems like the system has been designed to be purposely confusing and the people who need the most help, just don't get it."

Once a borrower defaults on their federal student loans, there are only a few delicate options they have to resolve their defaulted loan situation. The first option is to pay the loans off in full, but with the average amount of federal student loans per borrower exceeding $30,000, this is an unlikely option for nearly all defaulted borrowers. The second option is a loan consolidation. The challenge presented with this solution is the negative credit impact from the default status will not be removed from the borrower's credit history causing their credit worthiness to be negatively impacted over time. A borrower may be able to remove wage garnishment by pushing a defaulted loan into a current loan through consolidation, but their credit score will severely suffer. Finally, and most effectively, the third option is loan rehabilitation done correctly.

Once an agreement is formed with the government contracted collection agency, loan rehabilitation consists of a very strict ten-month commitment that requires the borrower to make nine on-time payments toward their defaulted loans. However, the way the payment amount is calculated can be tricky, although it is similar to applying for an income driven repayment plan - almost. The rehabilitation program takes it one step further by allowing the borrower to additionally account for their personal monthly expenses, something not calculated for in a standard income driven plan. The paperwork can be messy, confusing, and subjective to whomever may be on the other side of the phone at the collection agency.

After a loan is rehabilitated, the default status will be removed from the borrower's student loan history and the borrower will once again be eligible for all of the repayment benefits set in place by the U.S Department of Education that are offered only to loans with a "current" status. Best of all, once a defaulted borrower completes the rehabilitation program all national consumer credit reporting agencies will be instructed to completely remove the negative record of the default from the borrower's credit history - a big plus for completing a rehabilitation program.

Similarly, if a defaulted borrower slips and fails to make one (or two, depending on the loan type) payment before the next payment is due, the borrower will immediately be removed from the rehabilitation program indefinitely and the reported default will remain on the borrower's credit history indefinitely. This only proves that staying on top of this complicated process is crucial to getting out of the dangerous trap of the student loan default process.

Ameritech Financial will work with defaulted federal student loan borrowers by evaluating all federal loans, assisting with the tedious application paperwork, and applying for the loan rehabilitation programs on any loans eligible or in need of such service. Once enrolled, Ameritech Financial works with the borrower and guarantor to immediately cease all wage garnishments as well as ensures each borrower has a smooth transition out of default – as navigating loan rehabilitation back into a current repayment plan can be tricky.

"In 2017, your credit score is everything. Mortgage rates are low, and the economy is on the upswing" Knickerbocker said. "Now that we are helping borrowers in a way that we, or most companies, never could before we can start making a serious impact on the ever-growing defaulted student loan debt crisis. It doesn't feel good turning away someone who needs help and that is why we've expanded our service offerings to assist these important people in need."

"Our goal is always 100% client satisfaction by helping anyone with a federal student loan looking for solutions, regardless of the challenges they may bring to us. The Ameritech Financial customer service team works especially hard for all our clients. We've taken some of our best customer service staff members and dedicated them solely to our loan rehab department," said Knickerbocker, "Default rehab is serious. One wrong step and it could ruin someone's chances to escape the default trap, and that is exactly what the collection agencies want, so you stay – and pay. We're ready for the challenge."

About Ameritech Financial

Ameritech Financial is located in El Dorado Hills, California, right next to the California state capital of Sacramento. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation services for federal loan forgiveness programs offered through the Department of Education.

Each representative on the phone is certified through the International Association of Professional Debt Arbitrators (IAPDA) and has received the Certified Student Loan Professional certification through Association for Student Loan Relief (AFSLR).

Ameritech Financial prides themselves on their exceptional 24/7 Customer Service.

Contact

To learn more about The Ameritech Financial Project, please contact:

Ameritech Financial ( www.ameritechfinancial.com )

1101 Investment Blvd Ste. 290

El Dorado Hills, CA 95762

1-800-792-8621

[email protected]

Related Links

Ameritech Financial Homepage

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SOURCE Ameritech Financial