The American Government has launched various programs to facilitate their students to repay the educational loans, but still the students are finding it difficult is struggling hard to make their payment. More than $ 176 million has been garnished from the wages by the agencies employed to recover the unpaid loans from the students in a short period in the year 2015. The government is finding it difficult to manage this situation is finding new ways to recover the unpaid loans.
Sources could not reveal how much money could be recovered by spending this huge money but said the federal government has to garnish similar or equivalent money in the previous year too. The Director of Federal Education Budget project of America, Mr. Jason Delisle, said the recent analysis the list of defaulters is increasing day by day and it’s the highest the last quarter was the highest in the last three years. The administration is worried as the defaulters are increasing one side and they have to spend more money on the agencies for the garnishment.
About 336000 students who have borrowed money have moved into the defaulters list last quarter and nearly about a million defaulters were there in the last year alone. As it's very clear that the students who default once tend to do it f or the second time too and they have limited options to streamline their financial lives. As the wage garnishment increase, the borrower will find it very difficult to manage his life too.
The Federal government to facilitate and make it easier for the students to repay their loans has linked their repayment schemes with the current working salaries. This was introduced recently hoping the list of defaulters will reduce, the list released in last December said more than 4.6 million people has linked them t o the new scheme. This is an upfront 50 % increase compared to the previous year.
The private agents are keen on garnishments and are not taking all the Federal Government schemes to the borrowers and help them in making their repayments easier. The government has also come out with the attractive new schemes to facilitate the student borrower to limit his repayment schedule not more than 10 % of their total income. A new agreement was signed by the department of Treasury and Consumer financial protection Bureau on the making the companies were the student’s borrower’s work to be responsible for the payments and this will help the repayment in an easier way.
Mr. Delisile said all these are not helping the government to reduce the list of defaulters. The income-driven schemes are really helpful to a few cross sections, but what is the scenario of the borrowers who are really struggling is the question to be addressed. He is sure the policy makers will sooner come out with good schemes to help out people in this category.
