The great American student debt has ballooned to over $1.4 trillion and counting. But behind the disastrous statistics are the even more horrifying stories of many Americans who struggle to fulfill their American dreams, thanks to their thousands of dollars in student loan commitments.
But that story might change – at least for some.
In a recent article by the New York Times, it was found out that National Collegiate, which is a conglomeration of 15 trusts holding over 800,000 private student loans, has lost multiple court battles due to missing paperwork. This clerical error freed dozens of debtors from their liabilities – an error that cost National Collegiate $5 billion in estimated total.
A happy ending
Just to make things clear, this does not affect individuals outside National Collegiate’s handle. However, it demonstrates the absolute horror of terrible bookkeeping practices. These individuals are those individuals with legal cases in the court for defaulting on their loans against National Collegiate. When NC wasn’t able to provide consistent paperwork to back up their claims, the courts dismissed the cases.
An expensive risk
The US still ranks among the top five most expensive countries in the world to get an education. Unless your parents were able to adequately save for your college fund, or you’re born into a well-off family, getting a degree usually means going through the taxing process of getting a student debt, and spending a significant portion of your working life paying for said debt.
Grants and scholarships are ways to get around this dilemma. But if you’re not fortunate enough, the best thing you can do is to get the best program out there with the lowest interest rates and which have structures that best fit your future interests.
Before you take the private student loan option, be sure you have exhausted your federal student loan choices. Apart from having higher interest rates, you don’t really get any leverage from graduating from private colleges. Steer clear from them, if you can. Even if that means years of preparation.