LAS VEGAS, Nev. (FOX5) – It’s a tough time to be a student borrower. Last month, the Department of Education announced it would resume collection on defaulted student loans for the first time in five years.
That announcement promises to impact the more than 360,000 student borrowers across the state and in the Las Vegas Valley. To make matters worse, bad actors lurk in the background hoping to profit from debtors’ desperation.
So, how do you fend them off while keeping the collectors at bay?
“If you’re in good shape and then you fall behind on your student loans, or you’ve been delinquent and it just hasn’t been an issue until now, it’s about to be a very big issue.”
For a while, student borrowers enjoyed a respite from loan payments, but now they’re back with a vengeance.
“Now, not only are the balances increasing, but the federal government is actively collecting student loans which they haven’t done since March 2020.”
Experts say of the 363,000 student loan borrowers in Nevada – 19 percent are currently delinquent. You may find yourself among them.
“So the number one piece of advice is to get involved, to know what’s going on, to reach out to your loan servicer and get onto a payment plan.”
Peter Aldous is a consumer attorney with the Legal Aid Center of Southern Nevada. Aldous tells FOX5 student borrowers do have options – even after they’ve fallen into default. But getting back on track isn’t your only concern.
“Definitely watch out for scams. There are a lot of companies taking advantage of people who are worried about their student loans.”
Scammers’ method of contact may vary, but their promises remain very similar.
“There are scams that say they’re going to stop the wage garnishment, or we’re going to stop the social security garnishment, that can happen with student loans, or we’re going to save your tax refund, because all of those things are at risk.”
And all you have to pay is a small fee – or do you?
“None of those companies can really do any more than you can do by yourself, so they’re taking money that you could be using to get back on track with your student loans and keeping it for themselves.”
So where can nervous student loan holders turn?
“Most importantly you have a student loan servicer for all federal student loans and they are the number one contact for you to get back on track. They want to get you back on track just as much as you do.”
Bottom line: Falling behind on your student loans can seriously damage your credit, which impacts your ability to rent an apartment, or buy a home or car.
The Federal Student Aid website will have all the information you need about loan repayment and loan forgiveness programs. The state of Nevada also has an ombudsman’s office that can guide you through the student loan process.
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