This week we have part two of our interview with Larry L. Gilmore, president of the Student Loan Alliance (SLA). Larry is an expert on both the mortgage and student loan crises, and joined us last week for part one of this interview.
What is your advice to someone who can’t pay their student loans on time?
Seek immediate help.
There are a number of for profit debt management companies charging high fees to assist borrowers with workout options. While a number of these services are free, it is complicated to sort out what repayment options you qualify for, the best option for you, and completing the application. I strongly encourage they visit studentloanhelp.org, complete the online questionnaire, register, and get connected to a certified consumer credit counseling agency.
There seem to be the same players with student loans are there are with housing loans: the government, the servicers, and the borrowers. Are there strategies for each that would avert a student loan crisis?
The Government – More assertively incorporating the role of a 3rd party counseling organization to provide objective assistance. Similar to the mortgage industry foreclosure crisis, the student loan industry could benefit from a federally mandated funding mechanism to pay for counseling sessions (similar to the National Foreclosure Mitigation Counseling Program).
Servicers – aggressively seek partnerships with independent nonprofit counseling agencies that can assist in increasing borrower contact, qualify borrowers for available options, and assist in improving overall performance. Private servicers need to increase and make transparent what available workout options exist and provide a public contact list for escalation specifically for use by trusted 3rd party counselors.
Borrowers – Again, there are a number of for profit debt management companies charging high fees to assist borrowers with workout options. While a number of these services are free, it is complicated to sort out. strongly encourage they visit www.studentloanhelp.org, complete the online questionnaire, register, and get connected to a certified consumer credit counseling agency.