Default Not Inevitable for For-Profit School Attendees Despite High Rates, Says Ameritech Financial
Researchers at the Federal Reserve Bank of New York published data on student loan borrowers last fall revealing that students who attended certain types of schools are more likely to default on their loans, specifically students who attended for-profit institutions. This signals that certain student loan borrowers are not receiving the help they need. Ameritech Financial is a document preparation company that helps federal student loan borrowers identify, apply for, and stay enrolled in repayment plans that are intended to help prevent default.
“Students from for-profits who are defaulting on their loans may feel like there’s nowhere to turn,” said Tom Knickerbocker, Executive Vice President at Ameritech Financial. “But that’s simply not true. Ameritech Financial can provide assistance in guiding struggling borrowers to federal loan repayment programs.”
The research from the New York Fed shows not just that for-profit school attendees are more likely to default on loans, but that certain types of for-profit institutions and degree programs make borrowers more susceptible to default. In terms of institution type, borrowers who attended for-profit two-year schools are at the highest risk to default; in terms of degree type, associate’s degree holders and non-graduates are at the highest risk. Risk for default increases with age for all groups. The people least likely to default attended private, four-year nonprofit institutions and graduated with bachelor’s degrees.
While these are troubling statistics, the good news is that default does not need to be an inevitable outcome of struggling borrowers, even those who are experiencing a lot of financial difficulty. Student loan borrowers with federal loans may be eligible for certain repayment programs offered through the Department of Education that can potentially dramatically reduce their monthly loan payment. For some, selecting the right option and successfully enrolling can be difficult, though. Ameritech Financial helps their clients identify the right plan for their situation and apply for that plan. If the borrower is successfully enrolled in a plan, Ameritech Financial will assist the borrower in staying in that plan for as long as is needed.
Despite recent scrutiny of for-profit schools, the Department of Education has suspended certain regulations concerning for-profits that were enacted during the Obama administration. The Department has also revealed that it is only granting partial relief for some students who were defrauded by now-defunct for-profit school consortium Corinthian Colleges. Critics of the new policy, including Massachusetts Attorney General Maura Healey, believe that partial relief is inadequate.
Again, student loan borrowers may be spooked by these headlines. However, equipped with information and help, a student loan borrower can weather the storm. While debates rage in the media and headlines, borrowers can still enter into repayment plans like income-driven repayment, which bases the monthly payment on a borrower’s income and family size. In addition to preparing the paperwork for the initial application, Ameritech Financial will assist in preparing the yearly paperwork required to recertify the borrower’s enrollment.
“These income-driven repayment plans can be financial lifesavers for a lot of borrowers,” said Knickerbocker. “And at Ameritech Financial, we have the knowledge to guide former students through the most confusing parts of the process so they have a chance to avoid default and get their loan payments under control.”
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of people 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.
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