Student Loan Relief for NJ Retirees

NJ retirees

A growing number of people entering retirement are struggling to afford their student loan payments. Some older borrowers may have taken out loans for themselves to go back to school later in life, while others co-signed loans for their children or grandchildren. As of 2015, the average student loan debt owed by borrowers 65+ was $23,500 and nearly 40% of those loans were in default.* Carrying student loan debt into your 60’s can make it extremely difficult to sustain your standard of living through retirement.

 

Even worse news is that an increasing number of borrowers in retirement have had portions of their Social Security retirement and disability benefits garnished for nonpayment of federal student loans. If a loan is in default, lenders can take up to 15% of a retiree’s monthly Social Security benefits. This can affect retirees’ ability to buy food, pay for housing or afford needed medication. If you are struggling to make student loan payments under a retirement budget, consider the following options.

 

Many lenders offer loan modification options for borrowers struggling to keep up with their payments. Some offer ways to temporarily reduce student loan payments through deferment or forbearance. Deferment will allow you to put off your loans for a designated time period, usually no longer than three years. Borrowers approved for deferment will not have to make payments during that time. Under some loan agreements, you may even be able to defer interest accrued during the deferment period.

 

Forbearance is similar to deferment, with some slight differences. Under forbearance, your loans will be paused or reduced for up to a year. Your interest, however, will still continue to accrue under forbearance. Many times, lenders will allow borrowers to apply for an elective forbearance with the understanding that this kind of loan modification can only be utilized a limited number of times. It is important to note that these types of interventions are effective for momentary financial struggles, but are not long-term solutions. These options will allow you to postpone repayment, but they do not take away the debt.

 

Under some circumstances, you may be able to file a special request to get your student loan debt forgiven. This request must include a written Complaint indicating the student loan debt is causing undue hardship on the borrower. The official legal Complaint will be served in court together with a Summons on the applicable lender(s). A judge will then decide whether or not to forgive all or some of the student loan debt. This decision will be based on the borrower’s income, their financial hardships, any medical hardships and whether or not the individual has previously tried in good faith to make the loan payments.

 

While you can file this Complaint yourself, the document must be in a special format and include very specific information about the borrower’s financial situation. Up to 40% of these cases result in at least a partial loan forgiveness for the borrower. While law firms do charge a fee to assist in these filings, it’s easy to see that you’d likely get a huge return on your investment of the expert help of an experienced attorney. At Veitengruber Law, we know what judges are looking for in these filings and can help you present a detailed case that is likely to be decided in your favor.

 

Student loan debt can be hard to manage at any age, and especially so for those living on a fixed income. Don’t let student loan debt drain your financial resources in retirement. Call us today to get individualized advice on your specific case.

 

*Statistics from AARP

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Retirement and Student Loan Debt: How They’re Connected

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To most of us, the word retirement brings to mind images of a renewed enjoyment of life – a time when we will finally be able to put work aside and possibly even find time to stop and smell the roses. Then again, the phrase ‘student loan debt’ isn’t one we usually associate with our golden years.

Unfortunately, these days, more and more older Americans are entering the retirement age bracket, but are unable to look forward to retiring with joy. Sadly, many older Americans are still affected by student loans they took out in their younger years, but were simply unable (for a variety of reasons) to pay off.

In fact, there are approximately two million Americans aged 60+ who are still struggling under the weight of unpaid school loans. According to the Federal Reserve Bank Of New York, this number has tripled since 2005.

Some older Americans are saddled with student loans that they themselves took out years ago in order to put themselves through college, while others took on the responsibility of cosigning a student loan for a family member (usually children).

Regardless of the reason for student loan debt among older Americans, attempting to repay an amount that is perpetually compounding due to high interest rates is exceedingly difficult for this particular group. Due to the fixed income that comes along with retirement, many retirees are finding it virtually impossible to stay up to date on their student loan debt.

What this means for retired debtors is that they will likely experience wage garnishment from their Social Security income. For an already struggling group, this can spell financial disaster.

Although retired student loan debtors truthfully do only represent a very small portion of all student loan debtors, the seriousness of their particular situation is quite dire.

In fact, wage garnishment being taken out of Social Security payments will likely push these older Americans into poverty. Working hard your entire life, only to spend your golden years without two pennies to rub together just doesn’t sit right with this New Jersey law office.

Can you relate to Carrie Mallik*? Age 62, Carrie is experiencing some declining health and a home loan that she can’t afford. On top of that, she owes over $100,000 on a $15,000 student loan from her youth, due to the astronomical interest rate when she borrowed the money. Unable to afford both her mortgage payment and her student loan debt, she is quickly finding herself in a hopeless situation. If you can relate to Carrie, it’s important that you know that there is hope for you.

Because of new legislation, people who took out student loans prior to July 2013 will now be able to refinance their student loans at significantly lower interest rates.

Finding a NJ attorney like George Veitengruber, who is experienced in and passionate about credit counseling and debt restructuring, is key to your success in this situation.

Veitengruber Law can help you secure your retirement and allow you to enjoy your golden years as planned. Call now (732) 852-7295.

Image credit: The Arches

*Name changed