RICHMOND, VA (WWBT) - If you are one of 40 million Americans struggling to pay back federal student loans, a new Richmond business says it can help you reduce your payments and your debt.
Student loan debt is crushing many people's finances and dreams. The Federal Reserve says 27 percent of federal student loan borrowers are behind on payments, and 13.7 percent are in default, which can lead to wage garnishment.
"They start garnishing your wages, they start taking your tax refunds," said Mark Resnick of Student Loan Freedom, LLC. "Some of the stories are really tear-jerkers, people on Social Security Disability are getting garnished."
Resnick started Student Loan Freedom, a consulting service that helps people struggling with federal student loans get into U.S. Department of Education programs to reduce their payments.
The Department of Education offers borrowers a variety of repayment programs. You can consolidate multiple loans into one, perhaps lowering your payments or paying off the debt sooner. DOE also offers graduated payments, which start low and go up every two years, extended plans, which give you more time to pay it off, and income-based payments.
Some people can even qualify for the DOE's partial loan forgiveness programs.
"For example, if you work as a teacher or a fireman or you work in a public sector, or you work for a 401c3 non-profit," explains Resnick, "after 120 payments, there's a forgiveness program."
Resnick says he's even helped people qualify for plans with no payment while their income stays below $20,000, and he says it is not a deferment.
"Zero payments means you're paying your bill on time every month. It's shown as paid on time. So you never get into default," said Resnick.
Student Loan Freedom charges a one-time fee, which is $400 or higher, based on your situation. But Resnick says he points out to clients they can apply for these government programs themselves for free.
"What we do for people can be done for free. I make no secret of that. Is it easy? No. Is it tricky? Yes. That's why we exist," he said.
Resnick says his staff also checks to make sure borrowers stay on track each year. Their goal is to save borrowers money and improve their credit.
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