With college education becoming expensive, students are left with the sole choice of relying on educational loan to continue with their pursuit of higher education. However, in recent times, relying upon loans is also becoming a nightmare for students owing to the stiff economy and lack of employment in the country.
Defaulting on a student loan is never an inviting situation in the credit history of recent graduate. The reason is simple; it brings along multiple negative consequences that hurt personal and professional status badly alongside leading towards a financial crunch. However, what students or recent graduates must remember is the fact that a delinquent student loan can also hurt the personal, professional, or financial status of a recent graduate badly.
Student loan Delinquency – Uncovering the Myths
According to recent reports on delinquency, maximum student loan borrowers end up becoming a delinquent rather than a defaulter. Here, is a look at some of the common myths about a delinquent student loan that tends to become a belief among individuals -
* Delinquency is less common and less serious than defaults
Student loan delinquency is quite common among recent graduates. According to researches, the rate of delinquency is twice the number of defaulters. Delinquency like, defaults also hold several consequences like, trouble in receiving credits for future.
* Students graduating from college are less likely to face delinquency
Borrowers graduating from college though hold a less chance of becoming delinquent, experiences trouble in repaying the loan. According to recent reports, around 42 per cent of borrowers graduating from two-year public institutions are likely to face delinquency at least once during the first five years of repayment. The number tends to rise to 57 per cent at the for-profit institutions offering a 2-year degree course. Borrowers graduating from four-year private or public nonprofit institutions are also likely to become delinquent during the initial five years of repayment.
* Students borrowing Maximum End up Becoming Delinquent
Well, in reality students borrowing less amount hold a greater chance of becoming delinquent. The reasons owning to the repayment can be multiple like, not completing the degrees course and dropping out of college midway. Such situation hardly helps the individual get a good job and improve the financial status for repaying the loan amount.
* Students taking up loans hold a good knowledge on repayment choices
This is sadly, but the case. Most students borrowing loans hardly holds knowledge about repayments and the choices they have to make matters worse, most students fail to understand
the difference between a defaulted and a delinquent student loan. Though, the federal government has introduced number of repayment options, students with existing student loans and recent graduates hardly have any knowledge about the same.
A delinquent student loan can also get distressing like, a default. Students with existing loans must understand the fact and seek expert advice to save their credit history from such dents.
Author’s BIO – Jonathan James aims to guide and make the students aware about the consequences of a delinquent student loan. In this article, he explores the myths that are usually attached to delinquency.
I'm Louida from Atlanta, Georgia and I'm a mother of two daughters, blogger, and full time working mom at a Business Consulting Firm.
I love helping others learn how to start working from home on the internet free to supplement their current income.
I also blog at Productreviewmom.com
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